We first covered Warrantee seven years ago when the company’s founder Yusuke Shono was selected as a finalist at HackOsaka 2014, an annual startup conference hosted by Osaka City. His rare experience that every single home appliance he bought when he started living alone was broken triggered him to launch his first business Warrantee aiming to convert all warranties into digital.
It may be often hard for us to find a warranty form when we specifically need it. He created the service because he thought it would be convenient to manage such warranties electronically, but at first he had no idea about how to get companies to pay for it or how to grow the user base. They wondered if they could provide something like, “If you register your warranty on the platform, we’ll give you another year of warranty for free.” That was the beginning of their new insurance concept.
In late 2014, Warrantee received investment from Japanese cooking-recipe sharing site Cookpad (TSE:2193) and started exploring business synergy with them. This made Shono keenly aware of the strength of a complimentary service, and he says, “It’s amazing that (Cookpad) can attract so many users even though it’s free,”. This may be another reason why Warrantee is focused on developing a complimentary service.
Insurance for home appliances could be provided for free (as a way for sponsoring appliance manufacturers in return to obtain detailed user profiles) because it’s inexpensive, but not for automobiles because of high price. But if, for example, we divide a year by 365 days and ask a companies to pay 200 yen a day for each user, it could work.
In 2017, Warrantee, which had been touting themselves a warranty managing startup, suddenly started talking about insurance. Through its experience launching insurance business, Shono says his company could learn about Japan’s Insurance Business Act and how to coordinate with government agencies. Warrantee’s “Free Insurance” is a way of making on-demand insurance premium-free.
One example is our partnership between Japanese air-conditioner giant Daikin and property franchisor Century 21 Japan. Daikin wanted to connect with property owners (such as landlords) who owned a large number of air conditioners in their properties. However, since air conditioners are typically sold through retailers or housing equipment companies, Daikin had no profile of these air conditioner owners as end users.
By having Daikin sponsor our product, Warrantee provided property owners with an additional warranty for their air conditioners free of charge. In return, Daikin could obtain the real estate owner’s profiles. It was a win-win situation for both Daikin and the property owners.
Despite its start with insurance for home appliances, Shono’s company can provide the service even for clinics which typically own expensive medical equipments. In view of how pharmaceutical firms and medical equipment manufacturers approaching medical institutions, we may imagine their sales representatives making on-site visits and phone calls but this is inefficient because medical professionals are often very busy. If Warrantee can provide give the firms sales channels in return for sponsoring Free Insurance for clinics, medical professionals would be willing to find the time slot for meet-up.
Many manufacturers are pivoting their business model from product selling to subscription-based. For example, before a product becomes obsolete or broken, they can send customers a new model at no extra cost after 10 years of their first purchase. I believe that our Free Insurance is a great match for this trend.
The Free Insurance concept can be applied not only to “products” but also to “humans”. For example, it may give osteoporosis patients calcium supplements for free, or may allow people to sign up for complimentary health promotion services based on the result of their medical checkup. Some people may be reluctant to give out their profile but many may be willing to receive these rewards if the benefits outweigh the negatives.
Japan has a universal health insurance system that allows all its nationals to receive advanced medical care at lower cost. But US and Singapore don’t, so doctor bills there vary from hospital to hospital, making it easy for us to launch the Free Insurance in these markets. In the US, not only health insurance but also car insurance is expensive. We decided to open a branch office in Singapore because it is a good place to start something new.
Warrantee’s core members are located in Tokyo and Osaka, but we finally learned why Shono has repeatedly visited Singapore despite the inconvenience of being quarantined for two weeks amid the COVID-19 pandemic. The Free Insurance business seems to be doing quite well although the amount of sales is unknown, and the firm is aiming for an IPO in the US through an SPAC (Special Purpose Acquisition Company) in the near future, sources say.
In February, Evo Acquisition was incorporated as an SPAC to help get Japanese companies listed in the US. There will be more and more Japanese startups like Warrantee seeking a way out of the global market and aiming for a US IPO.