WI-Bred Weather Startup Understory Raises $1.9M, Moves HQ to Boston

4/30/14Follow @XconomyWI

Understory, a weather data and analytics startup that moved from Madison, WI, to Boston, has raised $1.9 million in a seed funding round, the company announced today.

Palo Alto, CA-based True Ventures led the round, with participation from RRE Ventures, Vegas Tech Fund, SK Ventures, and Boston entrepreneur and angel investor Andrew Payne. Understory previously received investments of $18,000 from Wisconsin-based startup accelerator Gener8tor and $50,000 from Boston hardware startup accelerator Bolt.

With the announcement, the company has changed its name from Subsidence—the new moniker refers to the area beneath a rainforest’s canopy.

Understory has created a device that monitors weather information, including wind speed and direction, temperature, humidity, rain, and hail. While traditional radar-enabled weather centers observe the atmosphere, Understory collects data directly at the Earth’s surface, which it says provides a more comprehensive and accurate picture of the movement and intensity of weather events.

Understory’s device is pretty small, weighing 5 pounds and measuring 2 feet tall and 1 foot in diameter. The idea is to install a dense network of these compact weather stations on the ground in various cities, creating a less expensive, more technologically advanced weather-tracking system than the current standard, co-founder and CEO Alex Kubicek said.

Kansas City is Understory’s pilot city, where it intends to install 50 of its weather stations by July.

“There’s [traditional] weather stations tens of miles apart, but they’re not close enough to create really good weather forecasts,” Kubicek said. “If you think of smartphones allowing for cost-effective sensors, we’re making a cost-effective weather sensor. The cost of installing 50 [of Understory’s devices] is less than the cost of the airport in Kansas City installing one traditional weather station.”

Understory plans to use the investment dollars to hire 10 people over the next six months, including software developers, data scientists, product managers, and electrical engineers, Kubicek said. The team is currently made up of Kubicek and Bryan Dow, who co-founded the company in 2012 in Madison, as well as Alex Jacobs, who came on board during the Bolt program.

Kubicek and Dow studied atmospheric science and mechanical engineering, respectively, at the University of Wisconsin-Madison, while Jacobs studied electrical engineering at the University of Arizona and has done research on robotically controlled boats that could take weather measurements from the eye of a hurricane, Kubicek said.

Understory says its technology has applications for insurance, agriculture, broadcasting, and transportation, among other sectors.

The insurance industry is Understory’s initial target market. Its first customer is Madison-based American Family Insurance, which is betting that the startup’s technology will help it save money and provide better customer service. American Family will use Understory’s storm data and weather projections to more efficiently deploy claims adjusters, Kubicek said.

“Right now they look at storms coming in, they’re a little unsure how many claims adjusters to send out,” Kubicek said.

Understory’s data will also help American Family be more proactive in contacting customers whose property might have been marred by a storm or could face impending damage, he said.

Understory originally intended to sell its products to consumers, hoping to attract engineers and hobbyists interested in putting open-source weather hardware in their backyards to crowdsource weather data.

“We found that even at the really low price point of $100-$200, there weren’t enough people who wanted to buy that where we could get really good coverage of weather data,” Kubicek said. He declined to name the current price of the device.

After going through Gener8tor’s first program in summer 2012, Understory pivoted to become a company selling to enterprise customers. A year later, Understory was accepted into Bolt’s inaugural group of startups. The company has decided to stay in Boston and will move into its own office later this year, Kubicek said.

Understory chose to remain in Boston because of the area’s strength in hardware technology research and startups, as well as the mentors and connections gained through Bolt, Kubicek said. His team has found it can draw from the expertise of similar tech companies in Boston who are several months or a couple of years ahead of Understory’s progress.

“There’s a great hardware community here in Boston. That’s what Bolt has really helped foster,” Kubicek said. In Wisconsin, “the Gener8tor program is doing an awesome job of helping grow the startup community there. But it’s still kind of growing, and we needed a stronger foundation to build what we’re trying to achieve.”

Jeff Engel is the editor of Xconomy Wisconsin. Email: jengel@xconomy.com Follow @XconomyWI

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