Expect to see a lot more Upsie.
The St. Paul-based consumer warranty startup announced an $18.2 million round of venture capital last week led by Silicon Valley-based True Ventures and with participation from Minnesota-based firms like St. Paul-based Bread & Butter Ventures and Minneapolis-based Matchstick Ventures. The firm has now raised about $25 million since 2015.
The latest round will in large part go into marketing, said CEO Clarence Bethea. The firm has been on a recent hot streak in part because of increased e-commerce and direct-to-consumer tech sales resulting from the Covid-19 pandemic. The round will also help Upsie hire. It has 16 employees with plans to hire at least seven more, according to its job board.
Bethea spoke with the Business Journal about Upsie's fundraising and what comes next. The interview has been edited for length and clarity.
Why raise money now? We want to continue to fulfill our promise to our customers, and we're going to take care of them first. In order to do that, you need to continue to grow your team, and you need to continue to expand your marketing. I'm always playing stuff close to the vest because we have large competitors, but I can say you're going to see a lot more of Upsie all over the country. We're going to continue to expand our marketing mix.
How did Covid-19 change your business? Starting on the bad side, a lot of people were affected by Covid. I pray that we bounce back quickly and we get jobs back and people start to heal from what happened. On the positive side, it sped up direct-to-consumer sales. It sped up people having to shop online versus being at that point-of-sale at the registerBecause people were shopping online, that put us right in front of them.
What about the warranty industry are you disrupting? If you've ever gone into a big-box store, you've gone to the register and you've been pitched a warranty. What most consumers don't know is those warranties can be marked up. For a lot of companies, this is a big part of their bottom line profit. So about 2% of Best Buy's business is warranties, but it makes up a huge portion of their bottom-line profit. For us, it's about making it an industry that's not focused on the retailers but focused on the consumer. For most people, historically, "warranty" has been a negative word. We want to make it cool to protect your devices. We think that there's a behavior change that we see happening that we're going to be on the forefront of.
Where does the name Upsie come from? It's the upside of an oopsie. A Minneapolis firm called Minnow came up with it.
