Understory, a Madison, Wisconsin-based insurance provider, is taking a significant step into the renewable energy sector. The company, known for its innovative weather-tracking technology, has secured $15 million in Series A funding to support this venture. This round was co-led by True Ventures and Prelude Ventures, marking a pivotal moment in Understory’s growth.
Revolutionizing Weather Data Collection
Understory was founded in 2014 by Alex Kubicek and Bryan Dow with a mission to enhance weather forecasting accuracy. They developed a network of ground-level weather stations called Dot, which measure various weather parameters 125,000 times per second. This advanced technology provides a detailed understanding of weather patterns, significantly improving the accuracy of storm warnings.
Kubicek explained, “We needed a much better weather dataset, and that’s when I connected with Bryan Dow to build the weather station. It is a solid-state measurement that measures wind, rain, and hail at 125,000 times a second, as well as measuring temperature, pressure, and humidity.”
Over the past eight years, Understory has deployed these weather stations globally, gathering extensive data that has been instrumental in creating global catastrophe models. These models help predict and mitigate weather-related risks, offering valuable insights to various industries.
From Weather Data to Insurance Innovation
In its quest to harness the full potential of its data, Understory transitioned into the insurance industry with the help of Neil Irwin, a seasoned executive from the insurance sector. Irwin joined as co-founder and international president, guiding Understory into the insurance market.
Understory’s insurance offerings, particularly in parametric insurance, address the increasing threats posed by severe weather. The company’s Dealers Open Lot insurance solution has been notably successful, providing early weather warnings and saving U.S. auto dealerships hundreds of millions of dollars in potential damages.
Irwin highlighted the impact of these early warnings, stating, “We’ve been able to avoid 10 major incidents and about $3 million of actual losses that would have occurred.”
New Horizons in Renewable Energy
Building on its success in the insurance industry, Understory is now venturing into the renewable energy sector. The recent $15 million Series A funding will enable Understory to apply its risk mitigation technology to solar farms, aiming to reduce hail damage and other weather-related risks.
Kubicek emphasized the urgency of this new direction, noting, “The current solar industry is actually in a crisis right now. A lot of these contracts are being canceled because the only place that you’re trying to build these large solar projects are in areas where the sky is literally trying to kill you. With our technology, we’re able to mitigate that risk.”
Understory’s technology can predict weather events with up to 45 minutes of notice, allowing solar farm operators to take preventative measures. This can significantly reduce potential losses, transforming a $10 million loss into a $5 million loss or even less.
My Perspective on Understory’s Expansion
From my point of view, Understory’s move into the renewable energy sector is both strategic and timely. The increasing frequency and severity of weather events pose significant challenges to the renewable energy industry, particularly solar farms. Understory’s proven track record in weather data collection and risk mitigation positions it well to address these challenges.
The company’s innovative approach to leveraging its weather data for insurance and now renewable energy showcases a remarkable synergy between technology and practical applications. By offering solutions that can save millions in potential damages, Understory not only protects investments but also promotes the adoption of renewable energy sources.
As I see it, the $15 million Series A funding will accelerate Understory’s ability to develop and deploy its technology, fostering greater resilience in the renewable energy sector. This expansion reflects a broader trend of integrating advanced technologies into traditional industries to enhance efficiency and sustainability.
In conclusion, Understory’s foray into renewable energy, backed by substantial funding, represents a significant advancement in both the insurance and renewable energy sectors. Their innovative technology has the potential to mitigate risks and drive growth, ultimately contributing to a more resilient and sustainable future.
