When he first launched Upsie in 2015, Clarence Bethea initially had a hard time selling investors on his startup that aimed to reinvent the product warranty business.
Not anymore. St. Paul-based Upsie announced Thursday that it has raised $18.2 million in a Series A round of funding.
"It's a milestone," he said. "This doesn't happen without the work that our team does. I'm just overjoyed for our team and our customers."
True Ventures, a Silicon Valley-based firm, was the lead investor in the round. Other Twin Cities-based firms such as Matchstick Ventures and Bread & Butter Ventures also participated.
Bethea said he will use the funding to double his staff, currently at 16 employees, as well as on marketing and to further build product offerings.
Over the years, Bethea has spoken out about the struggles he and other Black startup founders have faced in attracting venture capital dollars.
"I hope what this does is continue to show young founders who are coming up next that it is possible," he said. "The problem hasn't changed. We still have a diversity problem in venture and tech. But there's a lot of folks out there who are trying to make a change."
An Atlanta native who came to Minnesota in 2002 on a basketball scholarship to Bemidji State University, Bethea launched Upsie after frustrations getting a laptop fixed. His mission was to make warranties more affordable, simpler and easier to use.
Most warranties are sold as add-ons by retailers when customers buy smartphones, tablets or other devices. Upsie offers an alternative to that model where customers can buy a warranty directly from its website or mobile app, and for what it says is often a lower price than shoppers are offered at stores.
The warranty business "has always been about the hard sell. It's always been about no transparency, and the service was terrible," he said. "We believe what is driving our growth is that consumers are looking for something different. They're looking for a company they can trust in this space."
In 2017, Upsie was selected to be part of the Techstars accelerator at Target Corp. A few months after completing the program, Upsie closed on a $1.7 million round of seed funding. With its Series A funding, it has now raised a total of $25 million, Bethea said.
The pandemic led to a big spike in consumer electronics sales last year. Upsie felt it, too, with its sales more than doubling in 2020. Bethea declined to release revenue figures.
"The pandemic has shown people they need to have the best devices so they can connect to family and their jobs, and just overall live a productive life," he said.
While there may be a constraint on electronics sales in the coming months due to a shortage of chips, Bethea noted that means consumers will be even more motivated to make sure their existing devices continue to work for awhile.
"Protecting your devices is even more important now than it's ever been," he said.
