Cape Analytics has secured $14 million in a round led by venture firm Formation 8, with Shirish Sathaye, one of its general partners, joining the startup's board of directors. Other investors contributing to this round include Data Collective, XL Innovate, Lux Capital, Khosla Ventures, Promus Ventures, and Montage Ventures.
This is the first time Cape Analytics has raised external investment. The funding will be used to expand the startup's engineering and sales teams across the US.
Founded in 2014 by Ryan Kottenstette and Suat Gedikli, Cape Analytics combines computer vision, geospatial imagery, and machine learning to extract property data.
A key component of property insurance is assessing properties. Traditionally, this involved prospects filling out long forms and insurers quoting based on incomplete or outdated information or after conducting on-site property inspections. Due to the nature of this process, there are often discrepancies between what is quoted and what is charged.
In response, Cape Analytics developed a cloud-based platform that claims to provide "near inspection-quality data of high-value property features" and produces structured property data that integrates into an insurance carrier's quote engine via its API.
Earlier this year, San Francisco-based fintech startup Trov partnered with Suncorp Group to launch its on-demand insurance platform in Australia. Trov Protection, available via the Trov app based on Suncorp Group's insurance products, gives customers the option to selectively turn on or off insurance using their smartphone by swiping right or left, as well as make claims via the platform's automated bot and live chat.
Meanwhile, San Francisco-based health tech startup Clover, which raised $35 million in December last year, has been working to upend the traditional health insurance system by using real-time data analysis for predictive medicine and preventative care.
Cape Analytics wants to be an internal solution for the home insurance industry, rather than a disruptor of the industry.
The startup will be able to ride off the back of the growing demand for home insurance in the US. In 2015, the US home insurance industry delivered $86 billion in revenue, with IBIS World predicting "moderate growth" in the coming five years -- around 3.4 percent growth per year based on revenues delivered from 2011 to 2016.