Upsie Raises $18.2M to Disrupt Warranty Industry

Upsie Secures $18.2 Million in Series A Funding

Upsie, a startup focused on consumer warranties, has successfully completed a $18.2 million Series A funding round. This investment was spearheaded by True Ventures.

This latest financing increases the total capital raised by the St. Paul, Minnesota-based company to $25 million since its establishment in 2015.

Diverse Investor Participation

A substantial number of investors contributed to this funding round. Participants included Concrete Rose VC, Avanta Ventures, Kapor Capital, Samsung Next, Massive, Backstage Capital, Awesome People Ventures, Draft Ventures, Matchstick Ventures, M25, Silicon Valley Bank, and Uncommon VC. Several angel investors also participated.

Clarence Bethea, the founder of Upsie, initiated the company after observing the considerable markups applied to warranties by retailers.

A Customer-Centric Approach

Bethea’s primary objective was to prioritize the end consumer, creating a warranty process that is more transparent, affordable, and simplified. Upsie asserts that its customers can save between 50% and 90% compared to warranties offered by competitors.

Unlike many other warranty providers, such as SquareTrade, which typically offer warranties at the point of sale through retail partners, Upsie focuses on a direct-to-consumer model.

“Customers are often unaware they are paying up to 900% more for a warranty at the checkout than they should be,” Bethea explained. “There’s a lack of clarity regarding coverage and claim procedures.”

Growth Fueled by Pandemic Trends

Like many businesses, Upsie experienced increased demand in the past year, coinciding with the COVID-19 pandemic and the subsequent surge in consumer electronics purchases. According to the NPD Group Retail Tracking Service, sales increased by 17%.

Specifically, demand for laptops, desktops, and tablets rose significantly due to the shift towards distance learning and remote work. Consequently, Upsie’s revenue increased 2.5 times over the last 12 months, though specific revenue figures were not disclosed.

“Devices transitioned from being a convenience to a necessity with the rise of remote work,” Bethea stated to TechCrunch.

Post-Purchase Warranty Options

Upsie differentiates itself by allowing consumers to purchase warranties for products through its website or mobile app after the initial transaction. The company provides coverage for a wide range of devices – including smartphones, appliances, gaming consoles, and lawn equipment – representing approximately 60% of the warranty market.

Customers have a window of up to 120 days to purchase smartphone protection, 11 months for appliances, TVs, and fitness equipment, and 60 days for other electronics. All warranty details, including receipts, are digitally stored and readily accessible. Upsie also aims to provide same-day repairs for many devices.

The claim process is designed to be simple. Consumers upload a receipt image and provide the purchase price and serial/IMEA number. Filing a claim is initiated with a single button press. Furthermore, Upsie will facilitate repairs at authorized service centers, such as Apple Stores, with subsequent reimbursement to the customer.

“Our goal is to empower more individuals to protect their purchases with their own funds,” Bethea said. “Alleviating the financial burden of repairs, especially for essential items like laptops used for education, is crucial for families.”

Future Plans

Upsie intends to utilize the new funding to enhance brand awareness, expand its warranty product offerings, and grow its team, aiming to double its current staff of 15.

“We will continue to expand our online presence through digital marketing channels like Facebook and Google,” Bethea shared with TechCrunch.

True Ventures’ Continued Support

Puneet Agarwal, a partner at True Ventures, highlighted the firm’s increased investment in Upsie, citing the company’s consistent growth. True Ventures previously led Upsie’s $5 million seed round in April 2019.

True Ventures was initially drawn to the substantial size of the warranty industry (estimated at $100 billion globally) and the significant shortcomings in the consumer experience. They also recognized Bethea as an exceptional entrepreneur with a strong sense of authenticity.

“We prioritize investments in established industries where innovative companies can disrupt through their business models and products,” Agarwal explained. “Upsie has successfully achieved this disruption.”

Agarwal described Bethea’s direct-to-consumer approach in the warranty sector as a “bold” move.

“Upsie is uniquely positioned in this regard, representing the most significant shift in the industry,” Agarwal stated. “We are confident in his strategy, which is why we have increased our investment.”

Bethea’s unconventional background was also viewed favorably by True Ventures.

“His journey from Atlanta, Georgia, and the obstacles he overcame are inspiring,” Agarwal told TechCrunch. “Clarence embodies the type of founder we seek to support – someone with perseverance and determination.”