Polygrade Raises $6.3M Seed to Automate Home Warranty Claims With AI

Polygrade, a Toronto startup building AI agents to process home warranty claims, has emerged from stealth with $6.3 million in seed funding. Its investors include Construct Capital, American Family Ventures, Nine Four Ventures, Hustle Fund, Room and Pillar, BetaKit reported.

The money was raised in two tranches through simple agreements for future equity: $3.3 million in early 2025 and a further $3 million in July 2026. All figures are in US dollars.

What Polygrade Does

A home warranty is a service contract that covers the repair or replacement of appliances and household systems such as heating, cooling and plumbing. When something breaks, the homeowner files a claim, the warranty company sends a technician, and someone has to decide what is wrong, whether it is covered and how to fix it.

That process involves a chain of phone calls, photos, parts lookups and approvals among warranty companies, parts suppliers and service providers. Polygrade's agentic AI software automates work across the three main stages of a claim: diagnosis, evaluation and resolution. The aim is to cut the time and cost of each one.

The company sells to warranty firms, suppliers and service providers in the United States, where the home warranty market is concentrated.

A Team From Sears Home Services and Thumbtack

Polygrade's founders know the industry from the inside. CEO and co-founder David Steckel is a former custom homebuilder who founded Setter, a home services startup acquired by Thumbtack in 2020. He went on to hold a partnerships and innovation role at Thumbtack and later led AI transformation at Sears Home Services.

His co-founders, chief technology officer Eui Chung and head of product Kaustubh Vongole, are both Sears Home Services veterans.

Steckel sees a gap in the market. "There is not yet a global leader that's solving for a warranty-specific use case," he told BetaKit.

Early Customers

Polygrade has seven employees and says it already works with two of the five largest warranty firms in the United States. The company began about a year and a half ago under the name ProPay before taking its current form.

Landing two of the biggest players in a concentrated industry gives a small team a meaningful share of potential claim volume from the start, and a strong reference when approaching the rest of the market.

How Polygrade Will Use the Funding

The company plans to hire engineers to handle integrations with client systems and to add go-to-market staff, moving beyond the founder-led sales that have carried it so far.

Integration work is a practical necessity. Warranty companies run on established claims systems, and an AI product has to plug into them before it can do anything useful.

Why the Polygrade Funding Matters

Investors have been backing AI startups that target a single industry workflow in depth, on the theory that specialized products are easier to sell and harder to displace than general-purpose tools.

Home warranty claims fit that pattern. The work is high in volume, repetitive and expensive to handle by hand, and the industry has seen relatively little new software. Margins depend on resolving claims quickly and accurately, so even modest efficiency gains carry real financial weight.

With insurance-focused backers such as American Family Ventures on board and two major customers signed, Polygrade is moving from stealth into a market where its founders already have deep relationships.

Source

BetaKit — "Software startup Polygrade emerges from stealth to build AI for home warranty claims"