The Vanarama
Story

If you've heard of Vanarama, it may be because you've leased a van or a car. Maybe you follow a football team in the Vanarama National League and you’ve seen the results read out on the BBC. Maybe you remember one of the catchy adverts that used to annoy some people on Sky Sports and Sky Sports News. Alternatively, you might recall the big news in 2022 that Vanarama had been acquired by Auto Trader in a £200 million deal.

Whether you've heard of Vanarama or not, what you may not know is how it came to be and how it went from being one of more than 600 businesses operating in its sector, to the best-known in the category. It remains the only one to be bought by a business like AutoTrader, a FTSE 100 titan, for hundreds of millions of pounds.

Its beginnings, some would say, were very humble; others would call it ramshackle…

Whilst working for New Car Dealers in the early 2000s, Andy Alderson, who at the time was selling finance and lease deals to businesses and private customers, saw the potential of the Internet. This gave him the confidence to strike out on his own and his business was born.

Originally set up as a used car dealer on a tiny site in a little place called Cowroast, Tring, Andy spent his early days adopting new ways to sell and within 3 years the business regularly sold 50 to 60 used cars a month - 90% of which came through online inquiries.

Having established the used car business, Andy decided to get into new vehicles. Over the next three years, he evolved from specialising in pick-up trucks to moving into van leasing. Because of his love of 80s music and Bananarama (we know, no accounting for taste), he launched the Van Leasing business under the Vanarama brand in 2008, just as the 2008 credit crunch crisis began to really bite hard.

It was the credit crunch that Andy says really set him on the path to an eventual £200m exit, although he didn’t know it then! His focus shifted and everything he did and worked on became centred on people, customers, and his team. He set about building a business that people wanted to buy, rather than a business that he needed to sell.

It was this focus on people and customer obsession that meant over the next five years the business of van leasing doubled year on year. This gave him and his team the confidence to really think about what was possible in terms of becoming a stand-out brand.

Having spotted the opportunity to become THE brand in its space, Vanarama launched its first TV campaign in 2013, a campaign that could not have been better targeted. The team were selling vans on Sky Sports, a campaign that not only doubled the size of the business again, but also allowed what was the biggest call and investment decision the business had ever made. This was the decision to sponsor the conference league, now known as the National League. It would cost a total of £750,000 a year for three years, which at that point was three times the net asset value of the business. This decision is one Andy refers to as "an all on red moment,".

A big risk, but a calculated one, and one that paid off because as well as doing everything that Andy hoped for, which was doubling the business again and increasing brand awareness for its target customers, it became a brand name people knew about. Attracting talent or speaking to key contacts at manufacturers, dealer groups or lease companies became a little bit easier when the Vanarama name was being read out on the BBC results programme every week.

Vanarama National League Wembley Day Out Andy Alderson

Vanarama National League Wrexham Hollywood Sign

This strategic move also led to inbound from people that either wanted to buy the business or invest in it. Despite interest and offers ranging from £45-65m, at this point Andy wasn’t quite ready to sell. He instead chose to invest in the business to see it reach its full potential and become a brand that everyone had heard of. He still wanted to build the capability to sell other products like cars as well as vans. Plus, he had the belief that if he continued to focus on the customer and building a great business, the rewards would come and could well be bigger.

Developing the online capability of the business was also still on Andy’s mind and he wanted to go from a business that used the Internet to generate interest and leads, to a business that used the Internet and its website to deliver a brilliant customer experience and allow a customer to buy a vehicle fully online. But he needed help; he needed investment.

He couldn’t secure this investment from the banks, who, much like they are today, are constrained to what your balance sheet allows for, your net asset value. He wasn’t running a Tech Start-up or a SaaS business; he didn’t want to load the business with a load of debt and also didn’t want to buy a several other similar businesses and consolidate a sector, so it wasn’t suitable for traditional Private Equity. He was also in the Automotive sector, which along with other Backbone Sectors, suffers from a distinct lack of incoming investment. And found that he was suffering from what we now call an “Equity Gap”.

Andy needed capital but also needed support, counsel, connections, and the help to become THE Brand and tech-enabled, best-in-class business that delivered a class-leading Customer experience. The first step was building a brilliant C-suite team led by CFO Dan Taylor to transition Vanarama from a very "good big small business" to "a great small big business". Next, he sought out investors that would actually care about what he wanted to build and become a real partner to him and his business.

In 2017, he got his wish when Elliot Conway of Pentland Ventures backed Vanarama with an investment of £13m. Elliot saw the quality of the business it was and bought into the vision of what it could become. He, along with his colleague Emily Tam, played a huge role in making that vision a reality. The capital allowed the business to make the Investment it needed to make and allowed Andy to take some money off the table and concentrate on the business rather than his own financial security.

Andy, Dan, Elliot and Emily became the perfect partnership, so when the time came for Andy to decide what he wanted to do next, partnering with them again to help others experience a similar result to Vanarama, was a chance too good to pass up.