Kettle, the insurtech startup that uses advanced deep learning to enhance its reinsurance offering for natural disasters such as California's wildfires, has secured $4.71 million in seed funding.
Kettle was founded by Andrew Engler, the former vice president of digital at Argo Group, and Nathaniel Manning, the previous chief executive of Ushahidi, an open source software platform for community crisis response. Manning was also the first chief data officer of USAID.
The seed funding was led by True Ventures, with participation from Acrew Capital, Homebrew Ventures, Anthemis, and Inspired Capital.
Kettle is targeting the $300 billion-a-year reinsurance industry, starting with California wildfires, which have grown rampant over the past five years. So far in 2020, the largest fourteen wildfires have destroyed more than three and half million acres in California.
Kettle said its model, a form of machine learning called swarm intelligence, predicted all fourteen of these fires were in the top 20 percent of areas most likely to burn across California's hundred plus million acres.
The model uses terabytes of data from public and private data sources, such as NOAA weather data and NASA's MODIS and LIDAR satellites. Its neural networks run upward of 140 million model parameters to calculate probabilities of fire damage at the half square mile resolution across the state.
The reinsurance industry has seen a 68 percent drop in return on equity due to a threefold increase in catastrophes causing more than $1 billion in damage over the past 15 years, Kettle said. According to the National Oceanic and Atmospheric Administration (NOAA), 2019 was the fifth consecutive year in which ten separate $1 billion catastrophes hit the US.
Engler called reinsurance “the last stop against climate change," describing it as “a moral imperative that we improve this industry to protect people from the increasing disasters caused by climate change."
Adam D'Augelli, partner at True Ventures, said the fund likes to invest in companies that use technology to improve the world. "Reinsurance for climate-related events is an increasingly vital part of the insurance market and will continue to be,” he added.
Kettle, Andrew Engler, Nathaniel Manning, Wildfires, Adam D'Augelli, True Ventures, Acrew Capital, Homebrew Ventures, Anthemis, Inspired Capital