-

Motoring Innovation History

28 February 2018

History of innovation

At the turn of the last century, the pioneer of the modern British motor industry, William Morris, was just starting out in business.

Originally an Oxford cycle manufacturer, in 1904, the young Morris had been forced into bankruptcy by his business partner. He later repaid the creditors the money they were owed with interest – though under no legal obligation to do so. This honourable behaviour impressed Arthur Gillett, an Oxford banker who merged his private bank into the Barclays group in 1919.

Gillett later told the story of how he came to lend Morris the money to help finance the production of his first 250 cars:

"He came with a scheme of his to assemble first class parts of a small car and he was going to do the assembling. The money position came into it because I asked Morris what money he had got and he replied that Lord Macclesfield had lent him £4,000.

"I said to him "But how much have you got?", and he said "One shilling".

"I then said "Well, I will lend you another £4,000", and he looked in utter astonishment and said "Do you mean that?", and I replied "My dear fellow, this thing you have told me about has got a fortune behind it."

Thus, in 1912, when Morris began manufacturing automobiles in Cowley, Gillett offered his astonished client a larger loan than he had asked for.

In 1920, Gillett – by then a Barclays local director – persuaded the head office to offer Morris larger overdraft facilities, enabling a move to mass production and giving him a head start over Austin.

Morris Motors was soon so profitable that it hardly used the Barclays overdraft, as Morris modified the new technology pioneered in the US by Henry Ford for his assembly lines at Cowley and became one of Barclays’ largest depositors.

He increased his production from 1,932 cars in 1920 to 63,522 (a third of UK production) by 1929. The economies of scale enabled him to reduce the price of his basic model from £525 (the Morris Cowley) to £125 (the Morris Minor) per car.

Morris brought affordable motoring to the middle classes and became one of Britain’s foremost philanthropists, donating to Oxford University and medical charities.

Driving the silent revolution

Umm...

Errr...

Ha, ha! I don't even know.

Uhh..

Has everyone been asked this question?

Like a buzzing sound, I guess?

Like a bee?

Vvvhhhhhhhh....

That sort of thing.

The sound of electricity?

We'll, take a moment to just hear that.

[Silence]

I think we have it.

I had a vision. I saw that internal combustion engine cars were having a negative effect on the planet.

Travel shouldn't damage the earth and Pod Point was my vehicle to create that vision.

Most people thought that we were completely nuts. Why on earth would I get rid of my internal combustion engine vehicle for an electric one? I just genuinely believed in it, and when you believe in something you know, that can take you a long way. So the amount of charging infrastructure we've got to build to enable a mass adoption of electric vehicles is immense. It’s simultaneously frightening and the most inspiring part of what we do. We've banked with Barclays since we founded the business in 2009 so they've been with us the entire journey and I guess the venture debt product that we've started using recently is a great example of Barclays coming to us and saying, "We've seen the kind of business and we've seen some of the challenges you've got, perhaps this product would be of use to you".

Venture debt is a fairly innovative solution in the bank market, it allows companies like Pod Point that are disruptive and fast growing access to bank debt at an earlier stage than might otherwise be available. So fast growing companies like Pod Point historically would have found it difficult to access finance because they are loss-making because they are investing a lot of money in research and development, new technology and marketing.

So venture debt to me is a very innovative product, I can go and raise some money in the traditional sense but then Barclays will come along and just help me make a little bit more of that.
The technology and media and telecoms team at Barclays brings a range of industry expertise to our clients like Pod Point. All of our Relationship Directors have an in depth knowledge of the sector which we can bring to our client relationships.

They've really started to understand our business, even to the extent of spending whole days in the business understanding what we do. You know, they've become part of the team. So I think the biggest thing I look for in people that work for Pod Point is that I really want passionate, creative people.
The culture here is amazing

Quirky, Collaborative

It's fun.

It's great to be part of Silicon Roundabout because you are surrounded by loads of innovative tech companies.

It’s lively in the office; certainly it's full of dogs.

A few of the teams have said "we have got dogs, can we bring them?" Who am I to say no?

I'd love to have a dog in the office at Barclays. It's not going to happen.

(Whimpers)

I dream of a world where all transport doesn't use any fossil fuels so we can drive around completely guilt free we don't have to worry about what's coming out of the tail pipe of our car. It's a silent revolution. Shhhh!!

A century later, Barclays is still supporting emerging technology in the motoring industry. The dream of affordable motoring for all realised, the founder of Pod Point – Erik Fairbairn – has a different dream, a silent one. The dream of electric vehicles.

“Most people thought that we were completely nuts,” explains Fairbairn. “Why on earth would I get rid of my internal combustion engine vehicle for an electric one? I just genuinely believed in it, and when you believe in something you know, that can take you a long way.

“Travel shouldn't damage the earth and Pod Point was my vehicle to create that vision. The amount of charging infrastructure we've got to build to enable a mass adoption of electric vehicles is immense. It’s simultaneously frightening and the most inspiring part of what we do.”

Pod Point is the UK’s leading provider of electric vehicle charging, and the company has banked with Barclays since it was founded in 2009. Pod Point’s growth has been supported by our venture debt offering, which is partly guaranteed by the European Investment Fund1.

Relationship Director, Dominic McCarthy explains: “Venture debt is a fairly innovative solution in the bank market, it allows companies like Pod Point that are disruptive and fast growing access to bank debt at an earlier stage than might otherwise be available.

So fast growing companies like Pod Point historically would have found it difficult to access finance because they are loss-making, because they are investing a lot of money in research and development, new technology and marketing.”

Today there are around 132,000 electric vehicles on the road in the UK – in the last year alone Barclays directly financed over 1,000 of them to corporate clients. The National Grid, however, predicts that the number of electric vehicles could reach 9 million by 2030.

The next decade therefore could see the biggest transformation in the way we use our roads since the 1920s when William Morris helped lead the automotive revolution.

1 The loan was supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments.

European Commission logo
European Investment Fund logo

The autonomous vehicle – no longer a distant vision of the future, but a real prospect for our roads and an opportunity for fresh economic growth.

Read the 2016 report

As the first bank to introduce dedicated sector teams, Barclays are well placed to support you as you develop your business

Industry expertise

Retail and Wholesale

Industry specialists provide solutions to meet the challenges of a competitive and fast-moving sector.

Solutions

Financing

Discover flexible, expert financing solutions built around your business – from meeting day-to-day expenditure to funding your ambitions for growth.