After the L.A. Fires, Insurtech Firm Faura Finds More Demand

When wildfires engulfed Los Angeles’ Pacific Palisades, Valkyrie Holmes’s phone started buzzing a lot.

“It was kind of insane, because I post a lot on LinkedIn, so I was already posting about how crazy it was that in the first week of January we were having wildfires in New Jersey,” said Holmes, the CEO and co-founder of Faura, a tech startup that works with insurance companies to identify businesses and residential homes in disaster-prone areas.

“And, then, over the course of the first week of January, like 30 people independently reached out to me and said, ‘Have you seen what’s going on in L.A. right now?’ It was a really emotional couple of weeks for us.”

The calls came from insurance companies, as well as from friends and family, and happened to coincide with Faura’s announcement that it had raised a $3.5 million seed round. Harlem Capital and Building Ventures co-led the round, with Metaprop, Triple Five and Dorm Room Fund participating.

The irony was not lost on Holmes.

“It illustrated exactly what people have been seeing, which is that we have been living in areas that are very wildfire-prone, and nature will take its course when it’s matched with extremely high winds and a bunch of properties that have a lot of either dead vegetation or just a lot of vegetation around them,” Holmes said. “Faura focuses on survivability of a structure. So we’re saying wildfires happen in this area and this is the likelihood of a structure to survive or to withstand the effects of a disaster.”

Some insurance companies faced with insuring and paying out to home and business owners in areas prone to natural disasters are using Faura’s models to mitigate their financial vulnerability. The startup helps insurers better understand the survivability of high-risk properties using proprietary resilience models that analyze individual structures, and then matches them with mitigation plans to help underwriters and policyholders make more informed decisions about risk.

In addition, Faura creates a feedback loop for policyholders to qualify for more tailored insurance benefits while reducing insurer losses, generating more policy value. To ensure that the policy holders benefit, Faura offers a policyholder inspection tool that guides a property owner through a home walk-through to get the most accurate information. It also enables the homeowner to get rewarded for mitigation work with discounts, grants and other benefits.

Mitigating potential loss from wildfires involves businesses and homeowners practicing some basic preventative maintenance, Holmes said. That includes reinforcing windows, clearing roofs to make them less vulnerable to flying embers, and removing vegetation and debris, she said.

While natural disasters are increasing in frequency and severity, Holmes said she sees other tech companies trying to help California-based homeowners in danger zones.

“I think on the positive side, there’s a lot of private insurance companies that are really flourishing in the wildfire space, because they have these interesting models,” she said. “Delos and Kettle Insurance, for example. I don’t think they suffer losses at all, which is just pretty crazy, because they’re pretty much only in California.”

Founded in 2023, Manhattan-based Faura recently expanded to include three additional natural disaster threats, bringing their total up to five: wildfire, hurricane, hail, flood and earthquake. Underwriters can use Faura’s tools for either a manual assessment or quick assessment to understand the survivability of a home for in all five categories.

Proptech investors are taking note of the niche Faura has cultivated.

“From the viewpoint of venture investors, insurtech and risk mitigation proptech startups are becoming increasingly critical in the face of escalating climate catastrophes, such as the recent fires in Los Angeles,” Jeffrey Berman, a partner at Camber Creek, said in an email. “The intersection of climate risk, insurance and property technology presents challenges and investment opportunities, particularly as traditional risk models become outdated due to the increasing frequency and severity of natural disasters.”

For insurtech-proptech firms like Faura and its clients, the wind may be at their backs, but it’s not an ill wind that’s blowing.

“The biggest thing I always want people to be able to take away from this idea is that there are things you can do to reduce the risk on your home,” said Holmes. “It doesn’t have to be all doom and gloom. People in these areas knew that it was high-risk. And the people that did mitigation work, most of them saved their homes.”

Philip Russo can be reached at prusso@commercialobserver.com.