B2B equipment rental technology company Kwipped, headquartered in Wilmington, launched its Approve finance platform in 2020.
Since then, Kwipped has rebranded as Approve, and Approve has seen its originations grow 97% from first quarter of 2022 to the first quarter this year.
In a recent sign of growth, previous investors Live Oak Ventures and Venture South were joined by new funding partner Cofounders Capital in a recent $3 million Series A funding round, bringing an expectation of 50 new tech jobs.
“We’re truly excited about this funding that we know will substantially help drive our next growth phase,” said Robert Preville, CEO of Approve. “Continuing to center our operations in Wilmington is vital. We’re in a business-friendly city where we have huge capital networks, deep human capital resources and an attractive lifestyle. Innovation flourishes here, and I believe our creative company culture thrives on that innovative spirit.”
Preville and Rob Kaiser are part owners of Approve. Preville is part owner of the Greater Wilmington Business Journal along with Kaiser, who is the publisher of the Business Journal and the director of VentureSouth Wilmington.
Fueling their full embrace of lead software tool Approve, used initially as an internal tool for Kwipped, was the feedback they received from their suppliers. Robin Salter, chief marketing officer of Approve, explained in a January 2020 Business Journal story, “We recruited the nation’s top equipment finance companies into a lending network.
“Now they come to us and compete for the finance deals. Basically, we layered a lending network on top of our supplier network. Suppliers compete for the equipment deals and lenders compete to finance the deals.”
“This worked so well on our (Kwipped) marketplace, the suppliers started asking if they could use the same solution with their own direct customers. So we bundled all the features of our marketplace solution together and branded it Approve. Now suppliers can leverage the power of our technology and the competitive lender network,” he added.
Over 60% of B2B equipment is financed, according to Salter, who adds that only “9% of suppliers proactively promote financing options. It’s under the general business radar, but financing of all B2B equipment and software is measured in the trillions of dollars. Then again, if you look at just the equipment markets that we focus on, financing accounts for over $400 billion annually.”
The genesis of the software tool Approve was the result of informal and formal research focused on their suppliers. The chasm was stark between the 63% figure, identified in 2018 by ELFA (Equipment Leasing and Financing Association), and the 9% number revealed by Kwipped’s survey of equipment supply companies.
A deeper-dive survey the company conducted of equipment suppliers unearthed three dominant reasons for the distaste that the profession feels for the financing process, said Salter.
He said the reasons were:
• A slow and cumbersome process - It was primarily a manual process. Think weeks to months in information gathering, application review and getting the deal funded.
• Too many declined applications - With 50% of applications rejected, a great deal of time is wasted.
• Loss of visibility and control - The financing process was likened to a lender referral program. Financing application links pulls them away from their websites to the lenders’ website, shielding visibility. Finally, lenders communications often “went dark” after the initiation of the financing process.
The company evaluated each supplier customer issue as throbbing, curable pain points. Their response reflected the idea of “Listen to your customers, they will tell you what your business is.” In this case, in addition to identifying their fundamental, pain-alleviating approach, they also had the technical/developer chops to effectively build out the platform.
Proactively, they keyed on presenting Point-of-Sale Financing Options, clearly showing monthly finance payment options, especially early on, not just at process-end. Second, they provided succinct, detailed guidance on the differentiating options of financing. Third, they ensured that financing options are strategically embedded at every point of influence. A sometimes underestimated Approve feature is the ability for customers to easily submit one financing application and receive offers from multiple competing lenders.
Approve is looking for space in Wilmington to complement their current quarters in The Cotton Exchange complex. Their story is an indicator of Wilmington’s robust fintech business environment. For Preville, the city is an energizing place that will similarly energize the team expansion process. “In a technology environment,” he said, “ideation is streamlined when people are face to face. Wilmington is a great place to put that creative spark to work.”