‘I left school at 16 but my online car finance business is making nearly £50m’

Ten years ago, after co-founders Jim Wilkinson and Ryan Dignan had inked the private equity deal which would transform the fortunes of online car finance broker Zuto, the duo had arranged for the company to meet at their local pub in the northern English town of Macclesfield to share the news.

“It was our moment to shine and we broke down on the M56 hard shoulder,” laughs Wilkinson.

Despite the founders’ roadside blip — Wilkinson smiles when he also says that Dignan hails from a family of car dealers and grew up in car showrooms — Zuto has accelerated significantly. Founded in 2006, the firm now has 450 staff, called ‘Zutonites’ who are primarily based at its Manchester headquarters, with sales revenue nudging towards £50m and pre-tax profits rising to £5.9m.

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Wilkinson, a farmer’s son, left school at 16 and briefly became an apprentice footballer with Rochdale FC before first meeting Dignan when the pair worked at a call centre.

With Dignan’s background, it wasn’t long before they started looking at the lack of transparency around car financing, coupled with bad practice and unfair lending rates in the sector.

For two years, they worked in a small office without trading. Instead, they figured out “how to make the business work, how to be FCA [Financial Conduct Authority] regulated, the opportunity for banks to lend to customers and how to build a digital experience.”

Wilkinson admits that initially “lenders thought we were a bit crazy” for thinking that customers would cast aside bricks and mortar for finding loans online. “But we could deliver in a more automated way,” he adds, “customers could make their decisions with no extra pressure and find the best deal on the market.”

In 2010, his son, Jimmy, was also born. Five weeks later Wilkinson and wife Kate were told that he had been diagnosed with Prader-Willi syndrome, a genetic disorder affecting appetite and behaviour.

For 10 years, Jimmy lived at home with his parents while he now attends a specialist school in Burton upon Trent. “He stays there during the school term and he is really happy, which is the main thing.”

As Wilkinson dealt with home life, the founders had now accumulated debt of around £70,000 to keep the business alive. “Don’t ask me why we never went to the bank for a business loan,” says Wilkinson. “Perhaps because we were two young mid-twenties’ lads not really having a clue what we were doing.

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“We thought it would be easier with credit cards, personal loans and that’s how we bootstrapped from the off.”

What Zuto had going for them was a ‘laser like’ digital focus, together with the burgeoning rise of first travel, then insurance price comparison sites. “We knew we were in a sweet spot but it has taken longer than we thought to get there,” says Wilkinson.

Zuto’s platform sets out to connect with a large marketplace of lenders directly, utilising extensive data and customer research to return a guaranteed rate and pre-approval within seconds.

In 2014, they found VC funding and have secured £17m long-term investment from Scottish Equity Partners. “I’m a huge advocate of private equity, if you find the right partner with the same values and you’re aligned,” says Wilkinson. “It brings more rigour, high performance and governance to the business. It’s also given us a competitive advantage as well.”

A year later Zuto rebranded from its original Car Loan 4U name, which would enable the company to “hold the customer’s hand through the whole experience”. It then took Zuto 18 months to navigate SEO and digital search terms and return to an equal footing.

The company’s year-on-year growth has since been accelerated by COVID, the auto industry’s shortage of chips and an influx of customers buying used cars, one where demand was high and supply limited.

Today, Zuto trades in a market where £23bn is lent on used cars in the UK. “But there is still a big problem to solve for the customer,” adds Wilkinson. “It gives us plenty of runway to scale the business and grow as quickly as we have already done.”

Behind the brand: Zuto co-founder on…

Leadership

“I’ve had to self-develop a lot. For six years, I joined CEO peer-to-peer group Vistage. We had world-class speakers talking about digital marketing, recruitment and leadership behaviour. Whenever I heard a speaker I liked, we broke the bank to get them into the company for a few days and that helped in the early days to help us keep developing.

We always said that from the outset that we didn’t want our staff to have that Sunday night feeling and dread coming into work on a Monday. I’m proud to say that we still have that in the business.

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To get the best out of people we need to understand individuals and how they are on a personal level. Allowing a space for people to be vulnerable in front of each other is super important. As an example, before we start a leadership team meeting we go around the table first and ask how they are on a personal, health and business level. It allows us, when things are difficult, to have a fundamental trust that we will sort it out together.”

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