Nick Cavanaugh, Founder and CEO of Sensible Weather, joins Cheddar News' Closing Bell, where he explains how his company's 'Weather Guarantee' can help travelers get reimbursed if their vacations are interrupted by inclement weather. 

Closing Bell

Sensible Weather Helping Eliminate Travel Risks, Raises $12 Million in Funding

sensible weather is looking to transform the vacation experience. Imagine this, you've booked a trip to a tropical resort, but just as you're getting ready to leave for your trip, you learn that there's rain in the forecast, that's where sensible weather comes in The platform raising $12 million a funding round to eliminate the risk of inclement weather for travelers and travel partners joining us. Now nick, cavanaugh, founder and Ceo of sensible weather nick, welcome to the show. I think a lot of us have gone through this when we're planning a vacation, it's happened to us at least once or twice. We understand travelers can possibly get their money back due to bad weather. How would this all work? Yeah, that's right. So we're, we're a climate risk technology company. We essentially crunch a huge amount of data on the back end to understand the probabilities of these various risks that might impact your travel. And then through a product that we call the weather guarantee which is sold point of sale when you book that travel um we can protect you during, during the day of your stay, for example, at that tropical resort hotel where rain is forecast for that day, we automatically trigger a payment to you in the morning, which is which you are notified via text message and you can receive payment via a Ch Gitmo Paypal et cetera. So I'm curious how much rain has to be in the forecast for the coverage to kick in. It depends on the location and the time of year. So we structured products based on what we call it time deductible. So it's essentially like, you know, we can ensure the entire hotel might stay if it rains for three or more hours in a particular day, The less rainy destination, that threshold might be something like one hour. What's the price point for this? Nick Generally target a price point around 10% of card size, so if a hotel costs $200 a night, the add on guarantee is going to cost roughly $20. However, we have some flexibility and exactly how we price that and we're working with our partners to basically produce the product that the consumers want to purchase, that allows them the optimal protection that they're looking for. What systems are you guys using to forecast the weather to make these determinations of who's getting reimbursed and who isn't sure. So our weather forecasts come from from Noah models. So there, you know, government sanctioned models, Indeed the vast majority of weather data globally comes from government modeling centers. What's unique about us is we built a huge amount of infrastructure which, which allows us to process that data, both incredibly quickly and incredibly scalable. E um, so the, you know, the key thing here is that as a technology company, you know, we're, we're essentially just as capable of running a weather forecast app as we are reimbursing you for this weather guarantee. That allows us to be very flexible with, with how, how we price our products and how we pay out when consumers have implemented weather? All right, nick I have a scenario for you, the forecasters predicting weather, rainy weather, a lot of rain, but it proves to be inaccurate. No rain, it's a beautiful day, the sun comes out. What happens then under that circumstance you would get paid and then you'd have a great day. So that's, that's, that's a win win. I agree. That is a win win. How much to sensible weather costs for travelers? How do you make revenue if there are a lot plenty of rainy days, maybe an entire week? Sure. Yeah. So for any given policy, we essentially price the risk for that, you know, individual in that location and time of year. We had a slight margin on our end and then sometimes our partners at a slight margin for themselves how we make money. Is we essentially spread that risk around. So we cover lots of people in lots of different places, lots of different times of the year. That allows us on average, to take that margin to the bank. Your company raised $12 million dollars like I mentioned before, congratulations. What do you plan on doing with the funding, Hiring, hiring, hiring? We're a team of around 20, mostly technical, we're looking to roughly double before the end of the year looking for product managers, engineers, data scientists to continue building our platform. We're understanding that sensible weather is looking to expand its weather guidance around the world and more international markets. Are there any particular markets around the world that you're keeping an eye on or want to get into? Sure. Looking at europe in particular the U. K. And France. Outdoor recreation market is huge in France. Thanks, skiing, camping. So the european market is something that we're targeting and then we have to be that our first international expansion. When did your company, When did your company start? Nick. Sure. So yeah, I found it sensible and we closed our first round in January of 2020, which is pretty interesting time given that we are structured as the travel products. So two months later, COVID essentially shut down the industry that we were going after. How did the pandemic affect your business? Well, conveniently had just closed our first round. So we had, you know, we had, we had money in the bank and engineers to hire and a lot to build. Uh so you know, we built essentially our platform and the end over 18 months did our first beta launches last summer. Um and now that you know, Covid is coming to coming to an end and travel is picking up again uh you know publicly traded travel companies are announcing their Q one earnings, posting massive numbers, travels back and it's actually great timing for us to be closing this series. A these travelers get back to the market and were there with this new product that cannot protect Yeah, people really want to travel. They want to get out there. Nick, cavanaugh, founder and Ceo of sensible weather. Thanks so much for your time and information.