Hello and
welcome to the very first episode of Ignite and Scale,
the podcast where we deep dive into the stories of startup growth.
I'm thrilled to kick off our series with special guests, the co-founders
of Bumper, a company that's truly redefining the vehicle history space.
Bumpers made significant strides, especially with the recent success
of the Series B funding in a very challenging market.
Today, we're going to explore their journey,
the evolution of their strategies, and gather insights
that are not only inspiring but also immensely valuable
for entrepreneurs and innovators out there.
James Jack, good afternoon.
I like the afternoon you're telling us.
Yeah, no problem. No problem.
I mean, without further ado, perhaps you could both provide us
with an intro into your respective backgrounds
before we dive into some of the questions I've got for you.
Yeah, great.
I'll kick off there, Mike. Yeah.
So I'm the CEO and co-founder of Bumper.
I started my career and the current system on a graph schema
are some kind of top ten UK accountancy firm and
I was involved in kind of auditing management consultancy,
kind of a variety of other roles there before kind of pivoting my career
a bit and moving into fast growing tech startups.
So I was at a company called BET Fair as at Sky.
I was also at Wonga, which is kind of a fintech.
And then after that,
I worked and helped run
a portfolio business for
a tech V.C.
based based in London
and was involved there for a while until eventually being introduced
to Jack and coming up with the concepts of bumper.
Cool.
Yeah, I'll pick up now. So
my background
is automotive, I guess.
So you're following university undergrad scheme in a different sector.
I took my family's business, the parent company called BTC Fund,
which people may have heard of and perhaps more better
pulled out to such platforms they had that one could inquiry
makes a lot more relevant till we did a bumper platform called Auto Racing.
Subsequently became a product into the
smartphone,
which was a vehicle.
Health tech tool is a big health tech tool that identifies repair work.
Prices are presented to the customer, which as we'll explore a bit more
perhaps on today, instead of what the industry may know is
for, is kind of the core of what we do, helping, helping drivers say yes
to more work and ultimately obviously repairers convert more of that work.
And it was through that that platform business that was
that was introduced to James start of what we do can.
Yeah.
I mean just reflecting back on bumpy his journey and I think
I've known you guys for about six years now
and I remember as an advisor to the company
working on some of the key selling messages with you.
In fact, I think I sent you a copy of
a few days ago, but it how is those key selling messages
that were relevant then
and how they evolved into today's growth story and other any aspects
that have remained constant and what's shifted significantly?
Yeah, it's interesting.
We did send that across and it was actually quite an
it was interesting to reread that.
I think it was encouraging is that yeah, things have moved on a lot
in the way that we have solved this problem
in the technology that we utilize both internally
and externally and within the dealer's tech stack as well.
However, the core financial problem that we're solving
is still a problem that pretty much exists
today as much as it did perhaps a few years ago in certain cases
probably accelerated even more so, which is really around
obviously, the conversion of service
and repair work and the affordability that's associated with that.
And that's not to say this is always a totally distressed purchase.
Obviously, for a lot of people, it can be an element of
convenience that they're going to get bored to work day to day.
But you know, perhaps stretching himself to do so would be a problem.
So from my point of view, we recognize that to do this,
you can have all of the parts available.
You could have technician time available,
you could even have coach accounts available.
But if the customer doesn't have the funds available due to expensive,
that's a difficult message to to convey and ultimately to convert that work.
Really what we're doing is addressing that core problem
and the way that we do that, I would say, has evolved.
We're trying to make that whole transaction a better experience
for all involved and ultimately equals a much happier driver
at the end of it and greater customer retention is an outcome that we're laser
focused on today as we were as much as we were beforehand.
What has evolved is the other payment products that we have around that as well.
So that's a cool buy. Now pay later product.
I could name just four perhaps,
but many of our retailers now also utilize all of the payments products
that are paid by card products, facilitating credit, debit cards and
and who pay and Google pay, etc.
are paid by bank for processing open banking transactions.
And then most recently what we call PayPal, so actual physical machines.
So it's evolved to encapsulate any type of payment or any type of customer journey.
But ultimately there's still a lot of consistency in the way that we do this.
And you know, in terms of the initial vision for the company,
you've expanded the services as you've alluded to as well,
but what were they most pivotal moments in your journey today, would you say?
Well, I.
Would probably say the big inflection point came from fully
embedding our products into the software of DNS.
You know, before it was a completely standalone products
that relied on here, the engagement of the service advisor.
And here we're very fortunate that we have some incredibly engaged
high users, kind of super users of our products.
And however, you know, the nature of a service department, you know,
you have a lot of churn and you know, a lot of people coming in, coming out.
And for them always to be aware of the product
and how it works is, you know, a challenge to scale.
Whereas
actually by embedding it into the vehicle health check
process, the video platforms,
the DMS systems, it really enabled us
to scale without completely relying on the service advisor.
So we had effectively two flows, a fully digital one
that was completely within the hands of the consumer and they could
approve the work and spread the cost or pay the full amount.
And you know, accommodate
potentially a more digital focused consumer
as well as continuing to have a standalone product to our service device.
It could process that face to face or over the telephone.
So that's I think that was the big turning point
when we could offer both those and to start to cater for a wider segment,
a larger demographic, but also indeed is where
the stuff may not be as well trained or as knowledgeable or new to the business
through these integrations, we're transacting without them.
So that's really when we had a big take off moment
and led to our first institutional investors
for our series A funding round.
And what would you say was the biggest or most interesting hurdle
that you've overcome, whether that's operationally, strategically, financially?
Well, I think, you know, there's always hurdles to be tell you overcome.
I think when you feel like
you've got to overcome the kind of the biggest one
and then something else that comes around the corner, I probably think about
the kind of the broader journey of the business COVID.
You know, it's really a common answer to that was a major hurdle
in the sense that overnight pretty much everyone's businesses were shut down
and we were not immune to that, albeit we still did it to a small extent.
But that massively,
I guess,
changed the way that we saw our business,
but actually importantly, the way that our client,
the revenues, the franchise groups, the retailers that we work with
viewed it as well.
So yes, that meant
there was obviously fewer vehicles going through workshops.
But what it did mean coming out of it, it did change the way that a lot
of those transactions took place.
It probably well, it certainly forced a lot of retailers
to think about their digital channels more.
You physically couldn't have people coming on site
getting my cards prepared and ultimately paid for equally.
It obviously put some pressure or changes on people's income as well.
So very, very scary time for a fairly significant period for us as a business.
But actually coming out of that, I think there was some long term shifts
within the industry, within the driver base and obviously with us as well.
That changed the way that people transact.
So it created an openness around the conversation of affordability
and it was perhaps a more positive conversation.
But equally the digital journeys that James talked about that were perhaps
more focused on optimized, that ultimately which sits at the core of that
and that's for me, I think was a major hurdle that long term.
I think we've certainly benefited from in the way that we and
my customer base kind of addressed that coming out of it.
I guess, as you say, people started talking about cost of living crisis.
People needed a solution to help them through that.
And I guess, you know, when you're offering a consistent service,
which makes a lot of sense to the consumer as well,
that perhaps came into its own as we came out of it.
And you had they expected the customer journey
enhancements to make kind of a seamless kind of transaction.
I mean, just turn into the series B,
I mean, huge congratulations on that.
They've been few and far between.
And in the current market,
what were the key kind of strategies or insights that helped you
successfully secure that funding in what was a very difficult funded environment?
Yeah, I think there were a number of elements to this.
Firstly, you know,
only good businesses without sounding too kind of
very good businesses getting fed funding right now, you know,
you need to have strong unit economics, good revenue growth.
And we're very fortunate that we've we've grown from
we've grown kind of over ten X since 2020.
So, yeah, we've been doubling the business consistently for the last few years,
which has really, really helped.
And I guess one of the other elements is that we've,
we've built up trust with our investors basically from the series.
So we've
go every
single month we have a big list of management KPIs
that we set ourselves targets how we perform with a long,
quite decent running commentary that we provide every day, every investor.
So I think that helped develop trust to show that
we would do what we said we were going to do and that,
yeah, we're kind of on top of our numbers and we have a lot of kind of live
reporting dashboards again that we have available to our all our investors.
So I think that helps say, yeah, actually every investor we had from a series
A participated in our Series B and actually a few of them
doubled the amount they put in from A to B, So that certainly helped.
But being completely honest, it was a real numbers game as well
because we had to kiss a hell of a lot of frogs before we got. Yes.
And I think we're probably a bit naive on the VC world
when we first started pitching, you know, five, six, seven years ago and didn't
quite appreciate just how many pitches you have to do until you get that. Yes.
And and our series was pretty similar.
So it was having that and
determination
every time you got to know was just a piece of back up again
10 minutes later did a same pitch to a brand new investor
and try and access enthusiastic as you did previously.
So it certainly wasn't always easy.
And I think we had like a hundred no's.
I mean, it was getting pretty bleak to invest.
But, you know, I think we still had
belief in the products in the business.
And I think the final point is that we we raised
when we're in a position of strength, when we were growing strongly
and we had a lot of cash in the bank, yeah, I think a big mistake founders
make is leaving it until you have a36 month runway
and then you really are beholden to that investor.
And in this market they're squeezing you and valuations at the best of times.
But if it's suddenly running
out of cash as well, you know, it really puts you in that weak position.
So we probably raised a year before we needed to.
And looking back now, I think that was
definitely the right decision.
I guess not that the hard work will start again as well
with new investors, with existing investors doubling down on you as well.
I know you're launching some new products.
Are you able to kind of talk about any plans for 2024?
And then maybe as a follow up to that question,
how you intend to leverage air with enough?
Yeah, as you said one briefly, we are more than just a buy now pay later company.
Yes. Is at the core of what we do is we're best known for but we recognize
that not every customer wants to spread the cost.
You know, they certainly want to transact digitally,
but they may want to pay in full, which is why we introduced that to you.
That was managing to keep it as well,
where you physically couldn't come on site to transact.
But we launched our pay by card product, so the SMS email
generated link or ops, it could be embedded into
any of the platforms that we've mentioned already
that gives those people the ability to transact very quickly digitally that be
and allows the retailer to secure payment and without actually having to
come on site or if they do come on site, adding to the the queue of people
and these pinch points at the start or end of a data collection or drop off
and we then subsequently have launched a pay by by product.
So I think people will be growing familiar
with open banking as a concept experience the bank to bank transfers,
again, recognizing
some of the shifts in the dealer ecosystem of this huge cost
initiatives being put in place across all our retail partners
and we've got a massive ability to reduce their transaction fees.
So the banking carries a much, much lower transaction fee,
super secure can facilitate instant payment.
There's been a great reception to that product
and we're seeing utilize on both sides of the car
boot sales on Aftersales, which has been really exciting.
And then the actual physical machines which we call paper, they actually
bring together all of our payment options into one physical terminal.
So if you've got customers at the desk,
whether they want to spread the cost to pay in full by card or you can bank it,
we can facilitate that through a branded journey
that fully reconciles within the DMS to the ledger accounts, etc..
So really exciting, great tech, much more nascent than or the products,
but something that we're looking to
roll out en masse and then going back to to the other part of your question there
about other markets that we're
the reason we did some we've actually not to go to headcount.
We recognize that we've got a big opportunity in all markets.
We don't want to dilute our focus in the UK.
So we're doubling down on our UK
kind of team and infrastructure, but also adding to our headcount in
in Germany, Spain, the Netherlands and Republic of Ireland, where fundamentally
the problem that we get about on the call that we're looking to solve.
And so what unexpected costs potentially about
customer outcome, lack of retention of all the cars
that problem exists in those markets as much as it does here in the UK.
So we see that as an opportunity that we can we can capture
from what we've learned here in the UK, and that's something that we're, you know,
we're really excited about 2024 and becoming a truly international
payments business, not solely just the UK as well.
James I don't want to pick up on the point, but.
Yeah, I mean we've actually always used elements of I, you know,
probably the last four or five years
kind of using machine learning for our underwriting.
You know, we have such big datasets that we process
to really get the most out
of that and optimize our exit rates and ensure we're lending responsibly
and price and generating good raise rates.
You know, it's important to leverage that technology.
So that's always been kind of a pretty fundamental part of
of the business, and it really differentiates us
to the kind of people generally.
He don't collect the same amounts of data.
I mean, we collect the consumer finance data for the consumer,
but also the vehicle types, the engine sizes, MFT performance, you know,
you name it, hundreds if not thousands of additional datasets
that really give us unique insights.
So that's one point and that's only going to develop.
And you know, as AI becomes more sophisticated,
we'll be putting more elements of that into our underwriting and and processing.
And I guess the exciting elements that we're using
are much, much more recently a kind of around marketing.
So, you know, when we do
testimonial videos for the UK, you know, within minutes
you can generate German, Spanish, Dutch
versions at incredibly good standards.
So Pense, whereas before we would have you spent thousands
of pounds of having localized production teams filming it.
So elements like that all our SCA, all our content
and a lot of our sales processes now leverage
in terms of and Blanca emailing
prospects across Europe or writing very detailed
detailed personal messages.
We've even been trying it in the call centers as well
for some of the kind of more basic tests and requirements.
So really you know, it should and is touching every part of the business.
We had one of the UK's leading AI experts coming into the business
and presenting to the whole company
a couple of months ago and we had a two hour workshop
with our senior management team again, just making sure that we're learning
best practice of how this can be leveraged within our space,
but also being aware of some of the risks, you know, ensuring
that your own data is protected and secure and isn't
available to the wide the wider world.
So yeah, there's certainly risks.
But I think if you're going in there with your eyes open, have policies in place,
protect your data,
which is obviously incredibly crucial,
then you know, there's a lot of upsides to it.
And, you know, we're certainly excited about how we can continue to leverage it
across the business.
And finally, just to wrap up,
what's the single bit of advice that both for you
individually would give entrepreneurs who are starting out or looking
to scale their business, particularly in light of current market conditions?
I think from my side as well, James and I on today's podcast is the founders.
I think there's obviously a wider team of people
that are, you know, massively responsible for what we do today the growth,
the business,
the health of the business, what you said in terms of market conditions,
I think for me one of the best things would be doing as best as possible.
What a great team around you, you know, a team of people.
But fundamentally, you enjoy the company as well.
You know, when times are tough and we've had some very, very tough times,
I think you need to be able to
to rely on those people and also be able to spend time in the company is key.
You do something huge amounts of time.
James not joking actually about the amount of time we've we spend
together of late is is is extensive perhaps during that time
arguably the a good time to get a good amount of people together
you that's when you
really kind of see the country character people
you know when times are good everybody's happy to be you know part of it.
The whole success has many fathers and kind of narrative.
It's when times are hard and it's pull together
and think we've got some great members of team,
they've got some super long standing members of our senior team
that are as as responsible
for the growth of the business.
So for me, it's about getting the best people around you as possible.
Yeah, I mean, I completely agree with that.
You need to be enjoying the work.
You want to be coming in to work and,
you know, looking forward to it rather than dreading it.
So completely agree with that.
I mean, I think the other characteristic is definitely tenacity.
I mean, you talked about the series B, We will attend hundreds of pitches
during a series B, probably a similar number, it
seems, is a you know, it's when you have a know
that you pick yourself back up again and keep that enthusiasm.
So tenacity and you that's definitely applies to the sales team.
You know, there's been so many groups over the years who said, no, no, no, no.
And then the 50th time in asking suddenly is a yes.
So, yeah, I think that's been a huge part of Jack's success.
You know, we now have over 5000.
This is huge testament to the success of him and his team.
And I think the final point probably is,
you know, the expression that, you know, perfection is the enemy of good
and I do think founders of an idea
try and make it perfect and spend hours and hours and hours
thinking and strategizing without just actually getting on with it and doing it.
But it might not be perfect from day one.
But I think that action and taking a bit of a punt
is the key to a successful founder.
And you know, you need a NPV to get life and trying
to make something perfect that doesn't then have market sets could be too late.
So you're much better at getting things live, learning from them
and improving them as you go rather than trying to have this perfect product.
And day 100%.
Well, just really appreciate your time and sharing some of those
valuable insights and hopefully have you on in the next 6 to 9 months.
But thanks for your time. Much appreciated.
Cheers. Mike.
Big Yeah, thank you for having us, Mike.
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