By Jane Lanhee Lee
(Reuters) - Extend, a San Francisco tech startup that makes it easier for businesses to offer product warranties, said on Tuesday it raised $260 million in a funding round led by SoftBank Group Corp's Vision Fund 2 that valued the company at over $1 billion.
Extend allows companies to add a button to their online markets that gives customers the option to pay extra to protect their purchases, said Woodrow Levin, CEO and Co-founder of Extend.
If there is a problem with the product, Extend will handle the claim, in most cases through a customer service chatbot, said Levin.
Extend is among a growing number of tech startups, from logistics to payments to marketing, aimed at helping smaller companies build up their e-commerce business. Many have raised large amounts of funding in the past year.
"Merchants are trying to figure out how can they create a more level playing field against the Walmarts, against the Amazons, against these huge marketplaces. And they're shipping extended warranties, buy-now-pay-later. All of these tools are what they need in order to be able to compete for a share of customers' wallets," said Levin.
Nagraj Kashyap, managing partner at SoftBank Investment Advisers, said extended warranties and product protection services were ripe for change.
"Because of the way it was being practiced in the past, it literally only touches 1% of the available market," he said.
Extend, launched in 2019, sold over 300,000 protection plans last year and is on track this year to sell over 3 million plans, Levin said. He expects revenue this year to jump by more than 400%.
Merchants that add the Extend button to their online markets also get a cut of the fees, Levin said. Extend estimates that adding the Extend warranty service increases overall product sales by 11%.
(Reporting By Jane Lanhee Lee; editing by Richard Pullin)