The Pitch is a Milwaukee Business Journal and Wisconsin Inno series that gives a snapshot of a local startup. The Business Journal doesn’t endorse companies featured in The Pitch, nor is this an invitation to invest. To suggest a startup for possible future features, email tnykiel@bizjournals.com.
A lawyer by training but an entrepreneur at heart, Aaron Gregory had been thinking about starting a company for years.
"I was always more attracted to the product and innovation side of what was going on in any of the businesses I was working with," Gregory said. "I had been itching to start a company."
When the pandemic hit and remote work became the norm, a move from Seattle to the Milwaukee area enabled him to take the leap.
"I knew that it was going to be hard in any circumstance," Gregory said. "But if I was going to have to be traveling around and maybe taking a low to no salary, we needed to turn down our cost of living."
Gregory and his wife, who grew up in Whitefish Bay, traded their rented 1,700-square-foot Seattle bungalow for a Whitefish Bay house that cost half as much, Gregory said. Now, they live near family who can help with their three young kids.
The idea for Upwardli, the startup Gregory launched last year, came from his previous experience as general counsel for Remitly Global Inc., a Seattle-based international money transfer startup that went public in September in an initial public offering valued at $6.9 billion, according to Crunchbase.
Remitly (NASDAQ: RELY) serves many first-generation immigrants who aren't well-served by traditional financial products, Gregory said. He was surprised to learn that with all of the recent innovation in fintech, there weren't more other tools for those individuals.
"As a whole, this problem really hasn't been solved," Gregory said. "...If anyone should be benefiting from all this innovation ... that should be this underserved demographic."
Upwardli launched a minimum viable product in late November. To date, one of its biggest challenges — which Gregory said the company has been able to overcome so far — has been acquiring customers economically, Gregory said. The startup has been using paid social media advertising and has plans to test other strategies.
"One of the things it's very hard to do in financial services is win that trust at scale," he said. "It's hard to convince somebody who's never seen or heard of you to give you their credit card. If you can do that, you're already doing something kind of right."
Company name: Upwardli Financial Inc.
Headquarters: Milwaukee and Seattle
Year founded: 2021
CEO: Aaron Gregory
No. of employees: four full-time, five contractors
Website: www.upwardli.com
The product: A platform designed to make it easy for consumers with no credit or bad credit to build their credit and improve their financial lives. It aims to accelerate customers’ financial progress with a combination of financial education, personalized credit guidance and low-cost credit-building products.
How it makes money: It operates on a “freemium” revenue model supported by subscription fees and affiliate revenue. Users get a free personalized credit action plan and can subscribe to one of Upwardli's credit builder products for a flat fee. Upwardli also draws on user data to pair users with other financial products. If Upwardli successfully matches a user with a partner's product, it earns affiliate revenue after the user is successfully onboarded onto the affiliate's platform.
Size of the market: Upwardli estimates its U.S. market opportunity is more than $100 billion annually. It's targeting the nearly 100 million U.S. adults who have no credit score or a score below 600.
Competition: Traditional entry-level products including secured credit cards and installment loan credit builder products, and a range of emerging ‘alternative credit cards’ such as Extra and Tomo, Gregory said.
Competitive advantage: Upwardli's founding team brings relevant market and financial services expertise, having built innovative financial services for millions of global customers and having led companies from startup to unicorn status, Gregory said. The team also has in-house regulatory and product expertise, as well as a deep network that will enable them to form trusted partnerships quickly and raise the capital necessary to launch and grow, he added.
Business it could disrupt: Financial services for the traditional “credit disadvantaged,” Gregory said.
Key leaders: CEO and co-founder Aaron Gregory, and chief operating officer and co-founder Danielle Hill. Upwardli also recently hired a chief technology officer who will start in the spring.
Advisers: Rover.com founder Phil Kimmey
Investors: Angel investments from executives at Affirm, DLA Piper, Remitly, Amazon, MotoRefi (now Caribou), SproutSocial, Persona Nutrition, SmartSheet, Amperity, Rover and FlyHomes
Capital raised: $250,000 pre-seed round in Q3 2021
Capital sought: $2 million seed round expected in Q2 2022
Ideal exit: "Sky is the limit," Gregory said.
