A group of home services veterans has teamed up again, this time to bring AI and automation to a large but overlooked sector of the economy: home warranty claims.
Led by a team with experience building Setter, Thumbtack, and Sears Home Services, Toronto-based Polygrade sells software that uses agentic AI to reduce the time and cost required to address these types of claims for warranty companies, suppliers, and service providers across the United States.
“There is not yet a global leader that’s solving for a warranty-specific use case.”
David Steckel, Polygrade
Polygrade emerged from stealth today with a fresh name and $6.3 million USD ($9 million CAD) in previously unannounced seed funding from US investors. Polygrade raised this amount across an initial $3.3-million USD round from American Family Ventures, Nine Four Ventures, Hustle Fund, Room, and Pillar in early 2025 and a $3-million USD cheque from Construct Capital this July, both through simple agreements for future equity.
David Steckel, Polygrade’s co-founder and CEO, sees an opportunity to build “a ubiquitous warranty administration solution.” In an exclusive interview with BetaKit, he argued that it’s time for warranty tech to become its own industry.
Launched a year and a half ago under the name ProPay with a focus on helping contractors get paid faster, the startup recently rebranded to Polygrade to reflect its evolution into a firm aimed at improving the full warranty claim process, from diagnosis to resolution.
Polygrade plans to use this capital to grow its seven-person team with forward-deployed engineering hires to help new clients integrate its tech, as well as go-to-market staff as it expands beyond founder-led sales.
Steckel claimed the warranty tech space remains “a generation or two behind” field service management and insurance, with existing products that primarily record information, route tickets, and track claims. “There is not yet a global leader that’s solving for a warranty-specific use case,” he said.
Servicing a home warranty, like repairing a broken fridge, can require lots of communication, paperwork, and repeat visits. Polygrade aims to remove this administrative burden and slash the time and cost it takes to evaluate and resolve these claims. The startup’s AI agents automatically gather information from homeowners, make recommendations, source parts, process invoices, and facilitate contractor payments.
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While AI has the potential to expedite the warranty claims process, insurance claims adjusters have complained that the tech leads to misclassifications. When poorly deployed, AI can produce failures in accuracy, unfair automated denials, and a lack of transparency.
Steckel said Polygrade’s approach does not entail giving AI “unrestricted authority to make claims decisions.” He added that the startup’s agents operate within warranty companies’ existing rules and policies, and escalate decisions that exceed those parameters for human review. Its platform has been “designed to make its recommendations traceable rather than operate as a black box.”
Steckel sees automation as “progressive rather than all-or-nothing,” noting that depending on a client’s comfort level, AI “can function as an advisor, a co-pilot or automate defined actions within established thresholds.”
The Polygrade CEO began his career as a custom homebuilder before founding Setter, a Toronto-based home management software startup that was acquired by San Francisco home services marketplace Thumbtack in 2020. After that, Steckel focused on partnerships and innovation at Thumbtack before joining Sears Home Services where, alongside Eui Chung and Kaustabh Vongole, he helped lead its AI transformation and rebuild its direct-to-consumer business.
The gaps they saw in the warranty customer side of the company’s business inspired the three co-founders (Chung as CTO and Vongole as head of product) to join forces with other Setter, Thumbtack, and Sears Home Services colleagues to spin up Polygrade.
Construct Capital co-founder and managing partner Rachel Holt told BetaKit over email that “their combination of deep industry knowledge, product experience and AI expertise made us believe this was the right team to solve the problem.” Holt said the firm thinks Polygrade “has the potential to become the core platform the warranty industry has been missing.”
Steckel said Polygrade’s background has already proven advantageous. “I don’t think you can Y Combinator yourself into this industry,” he said. That expertise, coupled with its approach—the CEO claimed Polygrade does not require any “rip and replace” or multi-year integration timelines—helped it secure two of the top five largest warranty firms in the US as customers within a year in business.
Over time, Polygrade sees room to expand into other types of warranty products and bring its services to the Canadian market once it proves it can help these companies approve more claims south of the border.
Feature image courtesy Polygrade.