The rise in awareness for extended warranty and surge in penetration of laptops, tablets, and smartphones have boosted the growth of the global extended warranty market. According to Allied Market Research, the extended product warranty market is expected to grow to $169.82 billion.
Enter Extend, a San Francisco tech startup that makes it easier for businesses to offer product warranties as a service to merchants and innovates the broken customer experience associated with them.
Today, Extend announced it has raised $260 million in Series C funding to continue to scale its team, accelerate its technology footprint, and expand its suite of services that improve customer loyalty and drive revenue for merchants. The oversubscribed round, which was led by SoftBank Vision Fund 2, now puts the company at over a $1 billion valuation, making the 2-year old tech startup a member of the highly coveted unicorn club.
The funding round also includes participation from existing investors Meritech Capital Partners, PayPal Ventures and GreatPoint Ventures, and welcomes new investors Nationwide, Tomales Bay Capital, Launchpad Capital, 10X Capital and 40 North.
Founded in 2019 by Joe Moss, Michael Darmousseh, Rohan Shah, and Woodrow Levin, Extend works with leading retailers across consumer electronics, appliances, auto parts, sports and fitness, and more. The company’s modern and digitally-native solution delivers an up-leveled product protection experience that results in a win for merchants and their customers. Extend works with leading merchants including Peloton, iRobot, Harman/JBL, Backcountry, Balsam Hill, BlendJet, RealTruck, Traeger Grills, and more across the United States and Canada.
Extend allows companies to add a button to their online markets that gives customers the option to pay extra to protect their purchases, said Woodrow Levin, CEO and Co-founder of Extend. If there is a problem with the product, Extend will handle the claim, in most cases through a customer service chatbot, Levin added.
Extend is among a growing number of tech startups, from logistics to payments to marketing, aimed at helping smaller companies build up their e-commerce business. Many have raised large amounts of funding in the past year.
Since its launch in 2019, Extend has experienced rapid growth as it focused on modernizing the antiquated extended warranty industry through its AI technology and proprietary insurance stack. In the company’s first full year (2020), the high demand for Extend’s modern protection plan offering generated a 40x revenue increase. Just last year, Extend has sold over 300,000 protection plans and is on track this year to sell over 3 million plans, Levin said. He expects revenue this year to jump by more than 400%.
“With this new injection of capital and vote of confidence from our investors, Extend is in a strong position to continue to invest in building best-in-class product protection that serves our merchant partners and their customers,” said Woodrow Levin, CEO and Co-founder of Extend. “We started Extend to provide a product protection solution that eliminated the frustration and ‘gotchas’ associated with the legacy offerings in the market today. SoftBank equally shares in our long-term vision and we are thrilled to welcome them, and our other new investors, to the company.”
“As more consumers shop online, merchants are keen to provide customers with a greater peace of mind when making purchases. We believe Extend is reinventing the extended warranty industry through its leading platform, API solutions, and consumer-first approach,” said Nagraj Kashyap, Managing Partner at SoftBank Investment Advisers. “We are pleased to work with Woody and the Extend team to support their ambition of providing a better way for consumers to protect the products they love.”