As online commerce reaches new heights, people are looking for a personalized, more comprehensive, and all-around quality customer experience from retailers. This includes getting an extended warranty for anything purchased.
Clyde is essentially a product lifecycle platform that aims to fix the issues with easy access to comprehensive and reliable warranty programs. Its primary offering is an extended warranty product for retailers to sell their customers easy protection plans.
“It’s a similar type of offering as Affirm or Stripe,” said Clyde CEO Brandon Gell “We give you access to large insurance companies and we enable you to launch the program live on your website or physical point of sale and store wherever you sell.” He added.
Clyde recently had three successful funding rounds led by venture capital firms and other participants including Red Sea Ventures, Headline, and Spark Capital.
Can it transform the insurance and warranty space that has remained stagnant since its inception 1752? Let’s find out in the following with detailed information regarding the company, its origin, finances, roadmap, and achievements so far.
Brandon Gell and a Company that was built in his Grandmother’s Basement
It all began with Brandon Gell, a young architecture student in 2016. He usually spent most of his time acing the art of 3D printing modular housing. But he would have never imagined that he would be launching his company in September 2017.
What changed his mind was the experience Gell came across while working for a small tech startup in Ohio that built 3D scanners. He was put in charge of a 4-person project where he had to create an in-house product warranty program for the brand.
According to Brandon, several months passed by trying to get a hold of underwriters and administrators but the progress made was negligible and that frustrated him to a certain extent. Brandon felt that there was something to be done to help other consumers who faced the same situation as him.
The negative experience with dysfunctional warranty programs were repeated when Gell, who was going to a musical festival with his friends, bought a tent. It was sold with an extended warranty but he immediately lost the receipt before registering the product.
The only proof Gell had was buying the extended warranty which was supposed to be registered 3 days after the date of purchase. It meant that he could no longer avail the warranty despite paying for it. By this time the disappointment he felt as a consumer had left a lasting impression on Gell’s mind.
Gell had decided to do something about it using his expertise, knowledge, and trustworthy contacts whom he could entrust with the vision of what became Clyde in a few years. Gell noticed the difference in efficiency between fintech tools like Stripe and warranty programs. Companies like Stripe were way more advanced and customer-friendly than the entire warranty space, Gell thought to himself.
“I spent six months trying to find a company but it was clear that insurance, and especially the extended warranty space, wasn’t as mature. So I set up an office in my grandma’s New York apartment.” Brandon Gell, CEO of Clyde.
Brandon Gell first set up his office in his grandmother’s basement. With time, his team expanded with the joining of Josh Scaglione (current CTO), Jereme Holiman (current COO), Nick Scaglion (former Software Engineer at StructuredWeb and current lead Software Engineer of Clyde). Each one of them lent their experience and skills to help Gell cofound Clyde in New York in 2017.
“I started Clyde because I knew the warranty experience was fundamentally broken for customers as well as retailers” - Brandon Gell.
Clyde became the first insurance company that joined the production protection market that is open for all kinds of startups and Fortune 500 companies. The idea behind Clyde is to fill the gap in the product life cycle which is the cause of bad customer experience and reduced customer loyalty whenever any product is purchased from anywhere. The company was able to launch its primary extended warranty product in 2018.
“At Clyde, we talk to online, in-store, direct to consumer, and enterprise retailers daily. We hear about what they’re working on, what they’re struggling with, and what they’re hoping to achieve.” CEO of Clyde.
There is also a newly-added tool for merchants looking for a unified claims management that would solve customers’ product issues effectively. According to Clyde co-founders, the foundation of the company and its complete product lifecycle platform would always be their extended warranty offering.
“Before launching Clyde, I had the challenge of launching a go-to-market for a new consumer product. My team and I decided that a warranty program was critical to our strategy.” - Brandon Gell
Clyde Platform and Offering
Clyde essentially wants merchants and retailers to connect their stores with their platform to drive revenue and customer loyalty using Clyde’s technology and protection plans.
Launching a warranty program with Clyde is as simple as it gets. The platform is equipped with eCommerce plugins and API connections to QuickStart any retail platform based on;
Accessing the platform gives merchants a chance to seamlessly integrate Clyde’s protection plans into their products and onto their websites. That way it is easier for customers to purchase a certain protection plan. But Clyde’s role does not end there and continues even after the protection plan is purchased.
They simplify filing claims and contract information transparent and easy to access. Customers can access a feature-rich dashboard and e-Commerce applications to see how many contracts were sold and how much revenue it brings in real-time.
Unfortunately, product protection is a category marred by mishandling from big insurance corporations with little care for the customer experience. But Clyde’s goal is to reshape the warranty market completely through software that can be deployed in minutes, allowing retailers to offer extended warranties on almost all kinds of products.” Clyde's CEO
The entire process of claims is managed by the Clyde team so that businesses can focus on marketing goals and other aspects without worrying about customer service experience.
Clyde is working with competitive insurance partners who specialise in extended warranties that we shall discuss below
“I am humbled by our team's progress. Seeing how quickly an industry as old as the warranty space could be transformed with new ideas and technology is a testament to the needs of modern retailers and customers.” - Clyde's CEO
What does Clyde’s protection plans cover?
Clyde offers product coverage options that last for up to 5 years for customers buying a product from any partner retailer or merchant website. The options available are as follows:
- Wear and Tear
To protect products from normal and inevitable wear & tear, Clyde offers protection plans to guarantee the effects of mechanical or electrical performance.
- Accidental Damage
Drops and spills are some of the most common types of accidents that end up costing a lot in repairs. Clyde’s plan secures your product from such accidents.
- Power Surge
Power surges could cause a serious electrical breakdown and so Clyde’s protection plans also cover protection from unexpected power surges.
Market Growth, Competitors, and Partners
The warranty industry grew to a whopping $105 billion in the year 2020 in the face of coronavirus and global economic problems. Experts believe that it would continue to grow by 7% starting this year and reach a total of $158 billion between 2021-2026. Analytical data also indicates that North America holds a significant share of this particular market reason being the growth of disposable income.
This scenario puts Clyde, a venture-backed tech company in a prime position to benefit from heavy demand in eCommerce and the absence of easy to manage extended warranty/protection providers. Their extended warranty solution has an average attachment rate of 18%.
The company caters to different categories of merchants from consumer electronics to fitness & sporting equipment. A survey showed that 21% of contracts sold by Clyde were made by returning customers belonging to the electronics, equipment and jewelry categories.
Clyde CEO - “we’ve learned a lot over a short period - most of all, you shouldn’t have to understand the insurance industry to be successful at selling contracts. Your business has one focus, to sell a product.
According to research by statistica, three-quarters of global consumers leave their shopping carts without completing purchases but several industry indicators hint that they are willing to spend a bit more for a quality experience.
This is why Clyde believes in improving the customer experience for all businesses and has built a seamlessly integrated platform to drive data insights into customer loyalty and warranty sales. The company is already seeing an estimated annual revenue of $5 to $25 million.
“Clyde is product protection, and we partner with retailers, from pre-revenue D2C brands to the largest of enterprises, to insure LTV.
As of now, Clyde has partnered with 300 brands and retailers including Shopify, Adobe Commerce Cloud, BigCommerce etc. These partner brands depend on Clyde for improving lifecycle programs for their products. The list of Clyde partners is a diverse one that covers several industries like scooters, e-bikes, watch brands, appliances and hardware etc. More than 250 brands also joined the list of partners on Clyde including;
- Object Edge
- Tuft & Needle
- Shark Ninja
According to their 2019 data, Clyde has matched over 300,000 products, over 1000 businesses have installed the app, and achieved a 10% attachment rate (while the industry average is just 4%).
In the same year, the Clyde team launched 6 important facilities that still drive the most customer loyalty creating a buzz within the insurtech industry which is still evolving. Clyde almost launched a new brand with the following new additions to their online platform:
As Clyde completes financing goals, their platform is getting revamped to help and offer more benefit to the incoming waves or retail partners in future.
Clyde has a few competitors active within the industry who offer a similar solution for insurance-related issues to businesses and help them expand their capabilities. Some of the close competitors of Clyde include;
Mulberry is a New York-based product protection startup cofounded by Chinedu Eleanya in the year 2018. This company has around 40 employees at the moment and its estimated annual revenue is close to $3.5 million. In the past, Mulberry completed multiple funding rounds amassing a total of $34.9 million from investors like Commerce Ventures, Pace Capital, and Quiet Capital.
Upsie is an online coverage platform that offers its services for smartphone warranty, laptop insurance and other similar solutions. It is based in Minnesota and the founder & CEO of Upsie is Clarence Bethea. Till now, Upsie has raised $24.9 million during funding rounds led by Techstars and True Ventures. Its yearly revenue is close to $5 million.
Extend functions as an API-integrated platform for extended warranties, product protection and other relevant solutions. The founder and CEO of the company, Woodrow Levin, started the company in 2018. It is headquartered in San Francisco, California. The company has raised more than $336 million from investors like SoftBank Vision Fund and acquired Warranty Solutions Business for an undisclosed amount in November 2019.
$58 Million and 3 Funding Rounds
“When we launched our extended warranty solution, it was always our intention to use that as a foundation for our complete product lifecycle platform,” said Brandon Gell.
Since 2017 when it was first introduced in the world of insurtech, Clyde has been funded thrice. The latest funding round of series B led by Headline opened a new path for Clyde to make their platform future-ready and hire talents from around the world. The total number of investors that Clyde has had is around 19. Some of these investors are Headline, Vulcan, Red Sea Ventures, Crosslink Capital, etc.
The benchmark valuation of the company reached $300 million recently after the series B funding round closed successfully. Post money valuation after series B is just under $291 million while on the other hand, the last valuation of Clyde is close to $250 million. The company has hundreds of employees including new hires like Grant Pollock (new VP).
Oddup ran several algorithmic research on Clyde background data and several other significant metrics to pinpoint how the company would perform in its relevant industry while keeping in mind usual business factors. The Oddup score achieved by Clyde is 55.72 which is neither too high nor too low.
“Announcing our B series today, it becomes clear that the market was not only ready for a solution like Clyde but also for our next leap - to provide a comprehensive product lifecycle platform to both merchants and their customers.” - Clyde's CEO
Seed - $3 Million
In November of 2018, Clyde announced a seed funding round which was closed successfully by Red Sea Ventures which is known for specializing in early-stage venture investments. 10 other potential investors and partners join the funding round including Expa, Correlation Ventures, Satori Capital, Rainfall Ventures, and Summit Action.
“We worked closely with Scott Birnbaum and Paul Strachman of Red Sea Ventures to put together a killer syndicate and ended up significantly oversubscribing, so much so that we turned down an additional $4M of funding. Red Sea Ventures was extremely tactical and has become far more than investors – they’re friends and business partners.” - Brandon Gell.
Series A - $14 Million
May 2020 was the day when Clyde announced its series A funding round amidst the global pandemic craziness. But surprisingly, the warranty-focussed startup was supported by 9 different and some existing investors. The funding round was led by Spark Capital and closed after hitting the $14 million mark. Starting Line, RRE Ventures, Red Sea Ventures, and Abstract Ventures also participated in Clyde’s series A.
Series B - $41 Million
Clyde recently made headlines by successfully raising a total of $41 million ($16 million in working capital and $25 in series B) through a Series B funding round led by Headline and 4 other investors. Vulcan, Spark Capital, Crosslink were the other notable participants during this round.
Brandon Gell, Clyde CEO said that the company is seeing major growth in team size. By the end of the year, Clyde would have more than 100 employees. He also added that the fund received in series B shall help unlock Clyde’s true potential in future.
What is Clyde Planning to Do Next?
Clyde is overseen by an active group of members who are also the co-founders of the company. They have been prioritizing innovation in all aspects of their business model for this year and the next one.
“Over the last year, we’ve been working with PowerToFly, a recruiting platform focused on bringing women and underrepresented minorities. We’ve partnered with PowerToFly and their Global Director of Diversity and Inclusion, Dionna Smith, on the training side, too.” - COO of Clyde.
While creating, improving, and implementing an extended warranty solution that reflects every consumer’s expectations, Clyde is also offering a product lifecycle platform to connect retailers with their customers.
“Looking at the market, there is an inherent gap in the product lifecycle — where the purchase of a product and the post-purchase experience of that product are disconnected,” said Mathias Schilling, co-founder and managing partner, Headline. “By building out a complete product that addresses this void, Clyde is solving a critical need for everyone involved in the transaction. That vision and the company’s incredible team are just two of the reasons we are excited to partner and invest in Clyde.”
Clyde COO and co-founder Jereme Holiman said “In the future, we plan to double down on our efforts to make Clyde a truly diverse team. We’re proud of the progress we’ve made so far, especially when it comes to the gender distribution of our team, but we know there’s a lot more we could be doing, particularly regarding racial distribution.”
Gell is positive that his company will bring a wave of revolution within the warranty industry thanks to the inclusion of modern techniques, innovative technology, first hand experience, and consumer-first ideals.
Clyde's CEO - “There was a problem in the warranty space in 2017. It was inaccessible and impossible to understand. And slow. So slow. Yesterday, Clyde re-imagined what it meant to launch, manage, and find success with a warranty program. Today, we are helping our partners launch impactful omnichannel lifecycle experiences, funded by the highest performing warranty programs this space has seen.