Do you remember the last time you purchased an item at Best Buy? If you do, you might remember when they pitched an extended warranty program during check-out. But in this day and age, you end up purchasing from other e-commerce sites, where pricing is better and the smaller outfits rarely offer warranty programs. But Clyde changes that through its seamless, plug-in technology that builds that allows any merchant to offer these type of warranties. It only takes merchants 3 minutes to integrate with Clyde’s technology and it unlocks access to multiple insurers and data, creating a new channel for revenue.
AlleyWatch sat down with CEO and cofounder Brandon Gell to learn more about the origin of the business,l its plans for creating a tool to advance a static industry, and the company’s experience with Techstars.
Tell us about the product or service that Clyde offers.
Clyde builds technology and partnerships that enable businesses to offer warranties (usually with accident protection) at the point-of-sale, starting with the underserved extended warranty industry. Our marketplace of insurance and administrator partnerships, combined with plug-in technology, enables us to offer this passive revenue source to the medium and long-tale of the market at scale. We transform a 6-month, costly process into a 3-minute, free process, and use our network of stores to optimize margins and service quality. Clyde’s vision is to build the Stripe for insurance, providing businesses with tools and transforming the customer’s purchasing experience.
In a nutshell, we’re building the pipes for a $40B industry that hasn’t seen any innovation since the early ‘90s.
Clyde looks at the warranty and insurance industry similar to how Stripe and Braintree view the credit card industry; everyone should be able to incorporate extended warranties or insurance without having to worry about building massive partnerships or scalable technology.
Traditionally, you have to be Best Buy or Walmart to integrate a warranty program. Even then, these goliaths are using technology built in the early ‘90s and missing out on a massive amount of pricing and customer data. Clyde is building this loyalty/revenue driver for the medium and long-tail of the market, giving them tools that, up to this point, only big corporations could have. Furthermore, our tool is superior to how the head of the market interacts with this industry, giving them access to multiple insurers and data they otherwise wouldn’t have.
What market does Clyde target and how big is it?
Clyde, initially, targets the medium to long-tail of the e-commerce and in-store retail market. The extended warranty market at the moment is $40B – with Clyde, it has the potential to be far larger.
What is Clyde’s business model?
Every sale of a contract sold through Clyde is broken into three parts; the business’ margin, Clyde’s service fee, and the insurers premium. Because Clyde doesn’t take on the risk, our primary goal is to give business owners and end-customers the best experience possible.
What inspired the start of Clyde?
I spent the year before starting Clyde as a Venture for America fellow working for a small tech company in Columbus, Ohio. About 30% of the customers we sold our product to were asking for some sort of protection, whether it be a policy or contract. I reached out to every insurer and administer I could find to work with us and… almost none of them responded to me. Those that did ask for our annual revenue and the conversation was immediately over.
We were a great company for them to work with – they just had no quick way to integrate with us. After validating this problem with other businesses, and after pitching some of the biggest insurers in America, we knew we were onto something when investment and exclusivity offers came our way.
Tell us about the decision to join Techstars.
Techstars started at a great time for us. We’ve established great relationships and integrations with insurers, are live with our first stores and are actively adding value to businesses and their customers.
Right now, we’re 100% in growth mode. We’re live on Shopify and are using time at Techstars to grow the number of integrations and use this data to determine the next platform that we’ll build for. The mentors, businesses, and Techstars community is invaluable and we’re ecstatic to be a part of it.
What are the milestones that you plan to achieve within six months?
We’re planning on significantly growing the number of integrations with businesses and working to ensure their warranty program is a completely passive experience for them. Clyde is a service that aims to enhance a business’ core competency, not distract them from it.
In the next six months, we’re raising our seed round to complement our recently closed pre-seed as well as expanding to additional platforms.
What is the one piece of startup advice that you never got?
Have a vision for the future but build for today. There’s a huge amount of technical debt in the warranty and insurance industry and Clyde is building solutions that both expand the addressable market and make it a better experience for the existing one. We have our vision of the future and are building tools now to get us there.
If you could be put in touch with anyone in the New York community who would it be and why?
Kevin Ryan, 100%. He’s been an inspiration to each individual member of our team and is our primary request as a mentor while at Techstars. Our team comes from a wide range of backgrounds; from a cofounder of UrbanStems to an engineer from a leading bitcoin exchange, we’re agnostic about what we work on and seek to build solid products in spaces that need innovation. We think Kevin’s background is just as agnostic as ours.
Why did you launch in New York?
Our team is from NY and has known each other since before kindergarten – it was only natural for us to build the company in the city. One of our early insurance partners is also based in NY and being in the area allowed us to work closely with them in the early phases of Clyde.
What’s your favorite restaurant in the city?
Izakaya Mew is my go-to. One of my favorite authors is Haruki Murakami and this restaurant happens to both have great Japanese food and be inspired by his books.