Mulberry has grown rapidly in the two years since Chinedu Eleanya founded it to be the warranty service for direct to consumer brands.
Mulberry, which was already riding a consumer behavior shift caused by the emergence of startup brands selling just about everything to just about everyone, brought a much-needed new spin on the warranty service that retailers had relied on for years to make consumers comfortable with big ticket purchases. Now, thanks to the new shift to online shopping, the company is on its way to $10 million in ARR for 2020.
That’s why, prior to the pandemic, investors were willing to invest $10 million in the company. Pace Capital, an early-stage investment firm based in New York, led the round, which also included returning investors such as Founder Collective.
The pandemic then struck. According to Eleanya, the need for warranty services has increased as COVID-19 drives more shoppers (at least those who still have money to shop) away from stores and online.
Eleanya, a serial entrepreneur who moved to New York City from Nigeria and founded companies such as Cognical and Zibby, has found success with Mulberry and its online model.
To be sure, the company isn’t the only one focusing on e-commerce warranties. Clyde, which raised $14 million around the same time to provide similar services, is another option.
However, the market for these types of online services is still expanding rapidly, and Eleanya believes there is room for a few winners. “When it comes to point of sale financial innovation, the extended warranty space is the most intriguing,” he says.
From a retail standpoint, lending is good, but the bigger story is that the cost of customer acquisition continues to rise, according to Eleanya. According to him, retailers must maximize long-term value by retaining customers, and the best way to do so, he believes, is to offer service programs.
“We’re democratizing access for small and medium-sized retailers so that they can compete in this extremely expensive environment,” he explained.
Mulberry already collaborates with major direct-to-consumer brands such as Mirror, a smart workout mirror, Breville coffee makers, and Nectar Sleep, a Casper mattress competitor.
Mulberry has about $1 million in annual recurring revenue so far and is on track to hit $10 million in ARR this year, according to Eleanya.