Demetrius Gray quietly founded a new company last year. It was an insight from his first startup, WeatherCheck, that created a new business opportunity.
WeatherCheck, a Y Combinator-backed company founded in 2017, collected and analyzed weather data to help alert property owners, mortgage companies and insurers when buildings are likely to or have been impacted by severe weather, specifically hail damage. Over time, the company unearthed the challenges that exist for insurance policyholders in the disaster recovery process.
"You can tell people that their house is damaged all day long, but if the financial incentives weren't right — like they didn't have money for their insurance deductible or the contractor didn't have enough liquidity — then it was a real problem," he said in an interview Wednesday. "I was searching for contractors for our users all over the country. We worked on some claims in 2020 at WeatherCheck and that really uncovered an entirely new business."
Enter Captain.
Founded in May 2021, Captain emerged from stealth mode last week with a $104 million raise, which included $4 million in a seed round led by NFX and $100 million in debt financing from CoVenture. It aims to help homeowners rebuild up to six times faster after natural disasters by paying general contractors upfront, shortening the process from 180 to just 30 days.
Captain underwrites the contractors, working with insurance companies directly rather than the homeowners or contractors dealing with the cumbersome claims process themselves. The fintech company then pays all of the contractor's bills, such as material and labor costs associated with the project.
"We think that contractors need to be focused heavily on what you contract them to do: the work," Gray said. "They shouldn't have to bother with the fact that your insurance company wants this form completed at this date and time or that your mortgage company has a whole process that they want them to follow."
To get access to the fintech platform and services, contractors are paying Captain a portion of the their profits collected via a fee every 30 days.
In the past month, Captain has already deployed $5 million to some of the country's most storm-damaged areas, including communities in western Kentucky, which were devastated by December tornadoes. The company has partnered with 50 contractors thus far.
If $5 million in 30 days is any indicator — Captain is a capital intensive business. Gray said he had to connect with investors that could see the big picture.
"We really call it 'Wall Street meeting Main Street' ... there really wasn't anybody out here financing disasters and making money available so that the recovery process can happen quickly, aside from traditional lending," he said. "We figured out how to underwrite these losses well enough that we feel comfortable that the disaster recovery process doesn't have to be as slow as it has been."
Gray had met Pete Flint, general partner at San Francisco-based NFX, a number of years ago, but was reintroduced via Gary Beasley, CEO and co-founder of Roofstock. It was another investor, out of Memphis, that then introduced Gray to CoVenture. Gray noted Captian does have one Louisville investor: Ari Blum, founder and CEO of Clover Learning.
"The common thread was that a lot of the people who invested had experienced some challenge following a natural disaster. They had seen how hard it was," Gray said. "It's not something that happens every single day, but when it does happen, you remember."
Captain currently has nine employees, the vast majority of which are in Louisville. The company will be hiring for every position, Gray said, but primarily engineers, underwriters and claim servicers.
The startup is scaling quickly, too, looking to reach 50 to 75 employees by the end of the year. It's taking a remote first approach, but Gray said he does try to influence new hires to move to Louisville, where he plans to bring the team together quarterly.
"We do have to build an all-star team," Gray said. "We're looking for all-star talent all over the country because it does require additional fundraising and it requires doing very, very well every single time that people are relying us to get it right. That's where we're focused — get it right, hire great people and they'll help you do it."
Notably, while much of its operations are based in Louisville, Captain is actually headquartered in San Fransisco, where Gray said he has access to capital and experienced talent who have worked on something of this scale. Gray spends a week or two in San Fransisco each month.
Captain will have a launch party at Ten20 Craft Brewery, co-hosted by Amplify, Endeavor and Greater Louisville Inc. The event is from 5:30 p.m. to 8 p.m. on April 12. Details here.
