DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: Upsie changing warranty market through DTC; Tencent invests in Chinese Travel Site; Crazy Dog raises 300m RMB.

Upsie changing warranty market through DTC

Upsie, an American business looking to disrupt the warranty market through DTC, has raised USD$5m (£4m). The warranty industry, which is worth USD$40bn (£32bn) globally, has a reputation for scamming customers, charging too much and returning too little.

Upsie is betting that lower prices (up to 70% lower than traditional warranties), and more flexible options for ordering, tracking and claiming against warranties, will drive more users to its service and take some business away from the retailers that largely dominate the market today.

When an expensive purchase like a consumer electronics product breaks down, the buyer needs to pay out big money for repairs or replacements, and that worry drives many of those customers to pay a big sum for the guarantee that someone else will cover those liabilities. For a product that costs USD$900 (£712), consumers can end up paying an additional USD$130 (£103) for a warranty, which only costs the insurance company USD$10 (£8).

Just as DTC brands have leveraged the web, mobile apps and more recently social media to build direct relationships with consumers, Upsie is also bypassing retailers and hoping that consumers will consider their cheaper alternatives.

Tencent invests in Chinese Travel Site

Mafengwo, a Chinese travel website, announced today it has raised a USD$250m (£198m) Series E led by Tencent Holdings.

General Atlantic, Qiming Venture Partners, and others also participated in the round, which brings the Beijing company’s total raised to just over USD$500m (£396m).

Mafengwo claims to be the largest travel community in China, and has seen strong growth since launching in 2010. Over time, its platform has evolved to include e-commerce. In 2012, the company integrated travel booking services and then in 2013, Mafengwo began offering its own travel services.

CEO and co-founder Gang Chen said Mafengwo will use its new capital to build “a new one-stop travel service platform driven by AI and algorithm.”

The opportunity here is evident, with the global online travel booking market is expected to reach USD$1.95bn by 2026, according to a recent report from Zion Market Research, compared to an estimated USD$765bn in 2017. The same report noted that: “Emerging countries, such as China and India, are predicted to drive this regional market in the future, owing to increased internet adoption in the region.”

Crazy Dog raises 300m RMB

China-based Crazy Dog just secured 300m RMB (£34m) in a Series B round, to support its pet supply delivery business.

The funding comes after Crazy Dog sold more than 5 million bags of dog food last year on e-commerce platforms like Tmall, JD, and Amazon, and it plans to open 20 offline shops in 2019.

It’s an interesting investment. With dog food a bulky item, shipping and delivering it will not be a cheap process, meaning the margins won’t be huge. Unless the Chinese delivery market is very refined, it could be a while before we see returns here.

However, delivery is a hot topic for investors at the moment - who’s to say that pet food delivery services won’t see the same sort of popularity that take away delivery services have seen. The pet market in China is certainly big enough to support Crazy Dog.

That said, as Crunchbase points out, there is a lot of money flowing into tech at the moment, and this may just be an attempt to hop on that bandwagon. There’s always a chance we’ll see this bubble pop down the line.