Why we invested in Upsie, warranties for the 21st Century
The U.S. extended warranty industry today is ~$48B, and expected to grow to $67B in US / $170B globally by 2027. But the customer journey of selecting, purchasing, and exercising a warranty for any consumer electronics device is… antiquated. The pain points are numerous—who hasn’t experienced the creeping feeling of buyer’s remorse at checkout, only to be hard-pitched on a warranty add-on that further ticks up the price tag? It’s not surprising to learn that industry NPS of the customer experience here is a paltry 17 percent, and trust in extended warranties is waning.
Enter Upsie, a consumer-centric platform for purchasing product warranties.
We are excited to be a part of Upsie’s $18.2 Million in Series A Round, as the team reinvents the warranty experience through DTC relationships with purchasers, and by providing transparent education, competitive pricing, and exceptional service to consumers. Financial interactions are an integral part of our daily lives, and Upsie exemplifies our belief that financial technology promises to alter how every consumer, creator, and business in the world transacts with each other.
A enduring partnership
We first met Upsie founder & CEO Clarence Bethea through our partnership with TechStars, which aims to address four primary barriers for underrepresented entrepreneurs: access to capital, network, mentors, and education. Clarence completed a 13-week boot camp sponsored by Techstars and Target Corp in 2017.
It only takes a few minutes upon being introduced to Clarence to experience his passion for helping the consumer, motivating other entrepreneurs, and building relationships. Both eager to learn and share, his past consultant work with big box retailers serves as a strong foundation as an operator in this category. Coupled with Clarence’s tenacity for being relentless, inspiring, empathetic, and proven, he is the type of founder we aim to serve at Next.
A business model built for the customer
Upsie saves its customers up to 70 percent compared to competitor warranty plans, and meets consumers where they are: web and mobile. Covering a broad spectrum of consumer electronics—from household appliances, to smartphones, tablets, laptops—the company has a serious eye on big-box retailers. And with the past year’s growth in distanced learning and remote work, knowing devices are protected is critical. It’s not surprising that many of Upsie’s customers have returned and purchased multiple plans.
What comes next?
With the proliferation of customer data and improved analytics tools, a pure play warranty company like Upsie has the ability to possess a treasure trove of purchase data. The impact of this is enormous: this data will help inform Upsie’s strategy to both cross-sell and up-sell warranties to its existing customers, and also help guide consumer electronics brands as they look to more effectively acquire customers.
We look forward to seeing Upsie transform the warranty user experience in the electronics category with touchpoints across online, in-store, and web, offering dynamic pricing, and a fully-owned stack that internally has optimized the platform.
Brandon Hoffman is an investor with Samsung Next and collaborated with fellow investor, Antonio Key.