As online shopping takes a larger share of retail, the traditional opportunities for retailers to upsell extended protection plans are slowly disappearing. Clyde is an online extended warranty platform that integrates with the checkout process of e-commerce merchants, offering a seamless and integrated experience while adding a bit of margin for the retailer. At its core, the platform centralizes the purchase protection program management process for merchants both large and small with plugins already available for the major e-commerce platforms and a robust API that can be tapped into for other implementations. Consumers are also able to manage their needs through a separate dashboard and they even have the ability to add on protection after the initial sale.
AlleyWatch caught up with CEO and Founder Brandon Gell to learn more about the company, the impact COVID-19 has on e-commerce, and Clyde’s latest funding round, which brings its total funding raised to $17.3M.
Who were your investors and how much did you raise?
Clyde recently announced our $14M Series A funding. This new injection of funding was led by Spark Capital, with participation from Crosslink, RRE, Red Sea Ventures, Abstract Ventures, Starting Line Capital, Correlation Ventures, Jackson Gates, Brian Sugar, and other leaders in the e-commerce and fintech space, which will help us expand our capabilities to serve a new wave of retail partners.
Tell us about the product or service that Clyde offers.
Clyde’s platform enables retailers to launch, manage, and drive revenue & loyalty with an extremely high performing product protection program. Consumers add Clyde to their order throughout and after their purchasing journey in order to extend the product’s manufacturer’s warranty and cover it from accidents.
Retailers get access to pricing that is typically reserved for Fortune 10 companies, a platform (e-commerce apps, dashboard, APIs, widget) to manage their program, and performance that exceeds, by more than 4x, the industry standard. Consumers get transparent and easy to understand terms and conditions, a dashboard to manage their contracts and add protection to orders they initially passed on, and instant adjudication and resolutions. Clyde’s platform is used by enterprise organizations that are looking to level up their existing programs and by retailers, from emerging D2C brands to well-established organizations, looking to launch their first program.
What inspired the start of Clyde?
I was working to a startup that was designing, building, and selling an incredibly technical 3D scanner — but I couldn’t find a partner to offer product protection online. I recognized that if he couldn’t find a partner, lots of other online retailers were likely facing the same problem. This was not only damaging to these stores’ credibility, but it also diminished a passive revenue stream for them. Thus, the idea of Clyde was born.
How is Clyde different?
At Clyde, we provide e-commerce brands and their customers the most competitive rates with transparent pricing, powered by the largest and most well-known obligors and administrators in the space. Clyde SKUs are often the highest-margin product that our even customers sell. And consumers are seeing the value and enjoying the experience too: the uptake of warranty purchases averages 18 percent for retailers using Clyde — with some seeing uptake as high as 30 percent. This, compared to the industry average of just four percent, speaks volumes about the Clyde experience for the end-user purchasing product protection.
What market does Clyde target and how big is it?
Clyde targets e-commerce businesses — from startups to enterprises — that would benefit from offering extended warranties and accident protection to their customers. The warranty space is a $44-80B market in the US.
What’s your business model?
Clyde’s operates with a transactional business model, similar to payment financing technologies like Affirm. We only make money when our customers do. When a new online shop wants to start using Clyde, they can in minutes. We dynamically price contracts to optimize for revenue – a combo of margin and attachment rate. Clyde has plugins with Shopify, BigCommerce, Salesforce, Magento, and Woocommerce, as well as an API with a Node and PHP SDK, so retailers can add on Clyde to their businesses effortlessly.
How has COVID-19 impacted your business?
We know that now, more than ever, e-commerce is so important in order for consumers to have access to what they need. We’re doing what we can to tip the scales in the favor of independent retailers, brands, and their customers. We’ve seen attachment rates (the percentage of orders with extended warranty contracts purchased) increase since the start of COVID. We hypothesize that customers want to protect their valuable purchases more than ever.
What was the funding process like?
It was incredibly fast (roughly 1 month) and evolved quickly as our product, partnerships, and traction grew. We’ve developed strong partnerships with our existing investors, all of which were incredibly supportive – mentally and financially – which made having other investors join relatively smooth. We looked for investors that could be both teammates and mentors for our company. We are confident that those who we partnered with will bring a new wealth of experience to Clyde as we continue to grow our business and our team.
What are the biggest challenges that you faced while raising capital?
I was the sickest I’ve been in 5+ years while touring SF at the beginning of the raise. That was not fun – I was elbow bumping before COVID made it cool. Our competition made fundraising somewhat of a challenge, but it was also incredibly validating as we were being viewed in context. In hindsight, having competition is what allowed us to oversubscribe with conviction-driven investors.
What factors about your business led your investors to write the check?
Product, partnerships, and traction. Our investors did significant research to ultimately determine that our product outperforms the competition-driven forward by a product-led team. They dove deep into our partnerships and our partnership roadmap to ultimately determine how our strategy and pricing model is best for both retailers and consumers. Finally, they looked at the data and found product-market fit, significantly stronger success than incumbents and retail partners that are extremely happy with Clyde service and platform.
Product, partnerships, and traction. Our investors did significant research to ultimately determine that our product outperforms the competition-driven forward by a product-led team. They dove deep into our partnerships and our partnership roadmap to ultimately determine how our strategy and pricing model is best for both retailers and consumers. Finally, they looked at the data and found product-market fit, significantly stronger success than incumbents and retail partners that are extremely happy with Clyde service and platform.
What are the milestones you plan to achieve in the next six months?
In the near term, we plan to grow the team and continue to bring on retail partners at scale. We are launching enterprises, managing our growth upstream, and continuing to scale our self-onboarding platform. We will also be announcing some major developments in the platform and partnerships by EOY.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Two things: Manage burn and stay positive. Even with a fresh injection of capital, we are extremely diligent about managing our burn and getting through this crisis stronger than ever. As Scott Galloway puts it: “Look for opportunities where variance and weight are highest.”
Where do you see the company going now over the near term?
We have three focuses – scaling the product, growing retail partnerships, and building a world-class team.
What’s your favorite restaurant in the city?
Faro in Brooklyn, though it’s hard to choose.
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