Anders Ericson is tackling an overlooked problem in the auto industry, he shared, and investors are not missing an opportunity to get behind his solution.
“There is this glaring problem in the market where people with subprime credit, who are trying to buy a car, walk into these specialty dealerships and pay double what a vehicle is worth, and get 25 percent interest on it. the top. of that. They are being set up to get your car. [repossessed]. It’s a bad situation and an endless cycle of debt,” said Ericson, founder and CEO of whipoz.
Whipz is a digital retailer that specializes in affordable, high-mileage cars.
“We’re focusing on simplifying access to financing for people with high-risk credit or a low credit profile,” Ericson explained, noting that all vehicles are priced at $20,000 or less with more than 100,000 miles, a range of mileage that other online used car dealers do not touch
All vehicles go through a strict inspection and reconditioning process; and customers have five days or 250 miles to test drive the vehicle, he noted.
Click here to view Whipz and his inventory.
ignition switch
Ericson began to familiarize himself with the automotive industry when he joined the Automotive Dealer-to-Dealer Platform BacklotCars team in 2015 as vice president of sales, he recalled. When BacklotCars came out for a historic $425 million deal in 2020Ericson had the knowledge and resources to go ahead and create his own startup.
Whipz officially launched earlier this month, with a $1.8 million pre-seed round already finalized. It is believed to be the largest pre-seeding round in Kansas City history, Ericson said. The funding round was backed by four venture capital funds: M25, KCRise Fund, Lancaster Investments Y netnet — as well as supporters of the BacklotCars community, Ericson said.
“We had a goal of $1.5 million, and then we oversubscribed,” Ericson said. “In fact, we also ended up rejecting some money later. But we had some late entrants that we really wanted to include in our cap table, so we brought them in… We probably couldn’t have done it without Backlot.[Cars] history.”
Victor Gutwein, founder and managing partner of M25, envisions Whipz being an even bigger company than BacklotCars, he said, adding that Ericson will be able to build on its past experience.
“It hasn’t been often enough to find an early leader critical of a hugely successful local tech startup starting over in the same industry with an equally large, or possibly significantly larger, market opportunity,” Gutwein said. “That kind of vision has traditionally been a rare thing in the Midwest, but Anders clearly has his sights set on $426 million and up.”
Some of Whipz’s other investors are people who stopped investing in BacklotCars and didn’t want to miss out on this opportunity, Ericson said.
Click here to read more about BacklotCars’ $425 million outflow and what led its founders to success.
Having the support of four venture capital funds is key, he continued.
“Because if we need an extension round before our [seed] funding round, a fund can write a big check for an additional six months or a year of money,” Ericson explained. “A lot of early-stage startups don’t have that luxury. The other benefit is that once we get into our Series A, they have a lot of great connections to bigger funds to help close that funding round.”
Taking a page from what Ericson learned during his time at BacklotCars, he focuses on aggressively hiring a strategic team early on, he shared. From his growing team of 10, the transportation team is made up of people who previously worked at BacklotCars.
“Sean Hampton is our vice president of logistics and he really scaled the entire transportation team at BacklotCars,” said Ericson. “…And then Kelli Gray was the number one Transportation Manager on the team, so we really have a great Logistics Team. We’ve done a really good job of presenting our vision to potential employees and we’ve got a lot of smart people on board, and we know there’s a lot more talent here in Kansas City.”
in top gear
The $1.8 million in funding will be used to continue hiring and training employees, as well as streamline processes, Ericson said.
“We know from the beginning, there will be a lot of things that we will do wrong, and that will change as we go along,” he said. “But it will take us to find the best strategies for our sales process and marketing channels.”
Within its three weeks of operation, Whipz has sold a handful of vehicles in multiple states, Ericson said.
“We are not just selling our cars in Kansas City. Our first car was shipped to Manhattan, Kansas, then to East St. Louis, Branson, and Arkansas,” he said. “It shows the reach that this company has.”
Ericson, who grew up in Wisconsin and previously worked in San Francisco, ultimately decided to build his company in Kansas City because of the talent and business support system, he shared.
“It’s a hidden gem for those outside of Kansas City,” Ericson said. “People are very welcoming and everyone wants you to be successful. It’s rare for people to be so loyal.”