You’ve probably been asked if you’d like to purchase an extended warranty alongside a big buy like a workout machine, household appliance or electronic device. Knowing a company has your back should anything go wrong with their product can be a comforting reassurance. This is why San Francisco’s latest tech unicorn is working to give more consumers peace of mind as well as help merchants prolong their products’ lifespan.
Extend offers a digitally native API solution to help merchants offer extended warranties and protection plans. The company announced on Tuesday that it is now valued at $1.6 billion following its latest funding round. It raised $260 million in an oversubscribed Series C led by SoftBank Vision Fund 2, bringing its total funding to over $315 million to date.
It’s not uncommon for customers to encounter roadblocks when making a claim with their extended warranty. Whether it’s the absence of a purchase receipt or waiting on hold for half an hour to speak with a representative. As more people have come to make online purchases over the past year, Extend developed a way to help merchants build customer loyalty by alleviating potential headaches like these with its AI- and machine learning-powered chatbot, Kaley.
“Where we really flipped the script is by offering customers this up-leveled, digitally native, modern, dare I even say elegant customer experience,” Woodrow Levin, Extend’s CEO and co-founder, told Built In. “[Kaley] is available around the clock and she’s handling today 98 percent of customer interactions in up to 60 seconds.”
Informed by heaps of merchant reports on their customers’ most common issues, Kaley is capable of offering product-specific troubleshooting solutions in addition to handling claims. When a customer files a claim with Kaley, the bot asks specific questions like how the product broke and when. It can also generate a prepaid Fedex shipping label for returns.
The company has undergone significant growth over the past year, having seen a 40x revenue increase for its protection plan offering and selling over 300,000 plans in 2020 alone. Partnered with brands like Peloton and iRobot, Extend anticipates growing its revenue by 400 percent this year and selling over 3 million protection plans.
“The problem is that 99 percent of merchants do not have the ability to offer extended warranties and protection plans because the legacy players, the incumbents, are not technology-first companies,” Levin said. “Even the one percent of merchants that are being served today are utilizing a sub-optimal solution that’s not technology focused... and isn’t focused on serving customers in a modern way. So we’ve seen a tremendous demand and acceptance from merchant partners which has led to significant growth in protection plan sales.”
Extend has big investment plans on the heels of its recent growth and new funding. In addition to its plans for an international expansion, the company is looking to develop another product to better serve its merchant partners. It’s also expanding into product lifecycle marketing to provide coverage from the day the consumer purchases an item.
Looking ahead, Extend’s foremost initiative is to double its nearly 200-person team by the end of the year. It’s hiring for positions across the board in departments including machine learning, data science, product, engineering, design, marketing, sales, finance, accounting and operations.
