Affiliates of investment firm Bain Capital led a $238m equity investment round on Tuesday for SquareTrade, a US-based independent consumer warranty company that also counts financial services firm JP Morgan among its backers. Bain’s investment was made jointly by its private equity (PE) and venture capital (VC) divisions.
SquareTrade’s series B round raised $9m in 2000 from investors including Chase Capital Partners, the corporate venturing division of Chase Manhattan Bank prior to its merger with JP Morgan later that year.
Prior to the current round, SquareTrade had raised $10m, with additional backers including financial services firm Global Investment Partners, VC firm Western Presidio Capital, PE firms Draper Richards, Clayton, Dubilier & Rice and Argus Capital, and PE fund Staenberg Private Equity.
Founded in 1999, SquareTrade’s business was originally based in online merchant verification and dispute resolution for auction site eBay before growing into an independent warranty service for electronics and appliances that spans online and offline purchases.
Phil Loughlin, managing director of Bain Capital Partners, said: "We were attracted by the incredibly high satisfaction levels among consumers and retailers, along with the vision of co-founders Steve Abernethy and Ahmed Khaishgi, and their ability to execute the plan to build the first great brand in the space."
Claiming to charge an average of 40% of most retailers’ warranty fees, SquareTrade’s sales almost tripled last year as it added retailers including membership warehouse chain Costco as partners, and launched in the UK. SquareTrade’s retail partners now number over 30, and it expects to post similar growth figures in 2012.