- San Francisco-based Extend announced it raised $16.4 million in funding by GreatPoint Ventures to optimize extended warranties.
Extend, a San Francisco-based company that uses artificial intelligence that optimizes extended warranty programs, announced it raised $16.4 million in funding led by GreatPoint Ventures with participation from Pritzker Group Venture Capital, Lightbank, and Shah Capital Partners. Former Equifax CEO Rick Smith, Katerra CEO Michael Marks, DraftKings CEO Jason Robins, and Village Global co-founder Erik Torenberg also joined the round, according to VentureBeat.
Woodrow Levin, the founder and CEO of Extend, told VentureBeat that the funding will be used for product development. Plus Extend also purchased a number of agreements and assets related to administration of warranty programs from Affinity Insurance Services — which is an affiliate of Aon. Former Aon Warranty Solutions senior vice president Pedro Rodriguez is going to join Extend’s C-Suite as the SVP of insurance and strategy.
Extended warranties have only been accessible to the top 1% of merchants and they tend to have negative reputations with consumers. This means that a major portion of the market are not willing to provide protection plans.
Levin launched Extend after selling some of his previous startups like Estate Assist (acquired by DocuSign in 2015) and BringIt (acquired by IGT in 2012).
Extend operates as a fully licensed contract administrator. And it automatically the merchant’s warrantable products and pairs it with the plans from an insurer network. Extend handles claims by chat, phone, or online form — which are mostly resolved in a small amount of time. Usually, Extend sends customers back to the merchant to receive a replacement. However, Extend’s agents schedule appointments at a service center or the buyer’s home if the warranty covers a repair.
The company offers e-commerce platform integrations that utilize machine learning for dynamically testing prices, content, and placement. And the company also offers a free API.
The optimizations of warranty offer purchases result in attach rates double the industry average (11%) for legacy online protection plans.
And Extend charges a service fee whenever a protection plan is sold minus the revenue share for sold-through protection plans. The merchants collect the full price of the warranty at the time of sale — which includes the premium, the fee, and the merchant margin.
Extend works with merchants across a range of categories, including consumer electronics, furniture, jewelry, musical instruments, automotive parts, appliances, automotive, and sports and fitness. In terms of the numbers, Extend says its customer base collectively sees annual gross sales of over $11.5 billion. Some of the brands it reaches include August Locks, 1More, Club Cadet, Wynd, Zebit, Coinmine, Polycade, Outcast Garage, and New Air.
“We’ve been amazed with how fast Extend has grown. It’s a testament to the strength of the company’s leadership and technology,” added GreatPoint managing partner Andrew Perlman via VentureBeat. “This is an industry that has been yearning for innovation and protection plans that customers can trust. It’s about time that every manufacturer can now provide the Apple Care type experience that they know customers want.”