Understory, a leading weather data and insurance provider, has successfully raised $15 million in Series A funding.
According to a recent press release, this investment will fuel Understory's expansion into the renewable energy sector, focusing on developing comprehensive insurance products tailored to industries particularly susceptible to severe weather events.
Understory secures $15M Series A funding to expand into renewable energy sector, offering innovative insurance solutions to mitigate severe weather risks for solar farms.Image via Understory
Understory: Weather Data to Insurance
Founded in 2014 by Alex Kubicek and Brian Dow, Understory began with a mission to improve weather forecasting. They recognized that much of the data used in weather predictions was outdated, dating back to the 1980s.
To tackle this challenge, Understory developed Dot, a network of cutting-edge ground-level weather stations. Speaking with TechCrunch, Kubicek said that these stations provided unprecedented detail, measuring wind, rain, hail, temperature, pressure, and humidity 125,000 times per second.
This real-time, hyperlocal data offered a dramatically improved understanding of weather conditions at the ground level.
Over eight years, Understory deployed these weather stations globally, accumulating vast amounts of data. This data allowed the company to build comprehensive catastrophe models to assess risk for individual properties.
These models were validated by reinsurance partners, leading Understory to transition into offering their data as a Software-as-a-Service (SaaS) product.
Understory Expands into Insurance
In a pivotal move, Understory partnered with Neil Irwin, a senior executive from the insurance industry, to launch their own insurance company. This new direction led to the creation of the Dealers Open Lot insurance solution, which provides risk management for US auto dealers.
According to the company, this solution has protected dealer inventories across nearly 1,000 locations in the US, significantly reducing weather-related damages. For instance, one client was able to reduce hail damage from $110 million to $50 million thanks to early notifications provided by Understory.
Understory's approach has paid off, resulting in a 500% year-over-year growth. The recent $15 million Series A funding round, co-led by True Ventures and Prelude Ventures, highlights investors' confidence in Understory's vision and growth potential.
This funding will support Understory's expansion into the renewable energy sector, where their technology aims to mitigate weather-related risks for solar farms.
The renewable energy sector is increasingly vulnerable to severe weather, making effective risk management essential. Understory's proprietary technology can predict weather events with 45 minutes of notice, allowing solar farm operators to take preemptive measures, such as adjusting the angle of solar panels to minimize hail damage.
TechCrunch tells us that this proactive approach can significantly reduce potential losses-for example, turning a $10 million loss into a $5 million loss, or even a $2.5 million loss into $500,000.
Kubicek emphasizes their commitment to addressing real-world problems, stating, "Expanding from a tech-focused startup to a leading figure in the insurance market exemplifies our ability to scale solutions that tackle real-world problems."
