2023 Startups to Watch: Whipz plots buyer roadmap for motorists with subprime, thin credit

Editor’s note: Startland News selected 10 Kansas City scaling businesses to spotlight for its annual Startups to Watch list. Now in its eighth year, this feature recognizes founders and startups that editors believe will make some of the biggest news in the coming 12 months. The following is one of 2023’s companies.

Click here to view the full list of Startups to Watch — presented in partnership with Social Apex, supported by the Ewing Marion Kauffman Foundation, and independently produced by Startland News.

Whipz saw tremendous growth in its first few months of operations, said Anders Ericson, causing the team to push the pedal to the metal as they work to meet the demand of subprime and thin credit motorists needing quality vehicles.

“Transactions have gone through the roof. A huge focus right now is building out our operations capabilities. As we bring on more money, we plan to automate a lot of our processes by building and refining our tech solution, as well as our new financial product that streamlines the whole process of  somebody getting approved for a vehicle,” said Ericson, who co-founded Whipz with Charles Clow.

Whipz is a digital retailer, specializing in higher-mileage, affordable cars. The automotive startup made headlines in 2022 for its $1.8 million pre-seed round in July. The funding round was announced just weeks after Whipz’s official launch. Less than a year later, Ericson anticipates another funding round in the first quarter of 2023. 

“It’s going to be a much larger round with some larger funds involved that will help us hit our goals,” he noted. “It is a very asset-heavy business at the moment, so we’re trying to create some tech solutions and secure some additional lines of credit that would allow us to not be as asset heavy. One of the main things we’re trying to do is have dealer partners.”

Such partners would be able to post onto the Whipz platform, with Whipz acting as the middleman in the transaction between the dealer and customer, Ericson explained. The Whipz team is set to vet each dealer to ensure high quality vehicles, and dealers are responsible if a major part of the vehicle breaks down within the first 30 days of purchase, he continued.  

“Right now, every vehicle we put on the street, we have to purchase and recondition ourselves,” Ericson said, noting the limitations this puts on the team to meet demand. “By partnering with these dealers, more customers will have access to quality vehicles, while dealers can [sell] more of their cars through an additional lender.”

Click here to read more about Whipz.

Along with striving to have more cars available in 2023, Whipz is currently working on a financial solution that analyzes a potential customer’s credit application and credit report to quickly make a decision on whether or not they are approved, Ericson said. 

“We’re going to be launching a new product where somebody can get approved in under five minutes,” Ericson said. “Then, they will have access to a number of vehicles that will be curated based on their approval. We’re able to get the approval so quickly because we are the ones lending out the money. … ​​There are 12 data points that allow us to be more aggressive, whereas other banks or dealers wouldn’t take a chance on that customer.”

Ericson, who served as the vice president of Sales for BacklotCars before its historic $425 million deal in 2020, has ambitions for Whipz to be an even bigger company than BacklotCars, he teased. 

“The idea behind Whipz is much larger than Backlot[Cars], so if we are to succeed, it should be a much larger company,” he said. “A number of Backlot people are always reaching out, trying to help in any ways they can. And, Kansas City has a tech community that a lot of people don’t know of yet. It’s young and it’s growing, but it really is an up-and-coming city that has a ton of resources.”

With more funding, products and vehicles coming in 2023, Ericson is focused on investing in people, he said, emphasizing the importance of building a skilled and dedicated team.

“What we’ve seen, especially with BacklotCars, is that adding talented people early on is fundamental to growth,” Ericson said. “We’re able to set the building blocks of the company for years to come.”

Startups to Watch presented in partnership with Social Apex, supported by the Ewing Marion Kauffman Foundation, and independently produced by Startland News.

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Kansas City Startups to Watch in 2023

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