Embedded Finance for Storm Renovation — meet iink Payments

I’m excited to welcome iink Payments to the fast growing Fintech portfolio for Grand Ventures!

Grand Ventures led iink Payments’ $3.0M Seed round alongside Springtime Ventures, Simplex Ventures, Motivate Venture Capital, and Green Egg Ventures.

Whether we attribute the blame to global warming or to increased media attention, it feels like storm damage seems to get worse every year. And when it happens, it costs insurance companies a lot of money, causes homeowners extreme inconvenience, and sends contractors scrambling to get families back in their homes. On one of my first calls with Tom McGrath, the CEO of iink, he described the company as “Docusign plus Venmo” for the storm restoration industry. When storm damage hits, iink brings homeowners back into their homes sooner, by facilitating contractor payments within days. In turn, iink helps insurance companies save on temporary housing costs while families are displaced. A win-win-win for homeowners, insurance companies, and contractors, not to mention the banks, who are party to the process and want to ensure the repairs are completed.

Here are a few of the top things that made this a high conviction investment for Grand Ventures.

Cash is King!

While the saying is cliche and holds different meanings for lots of people, cash is a strong motivator, whether you’re on the sending or receiving end of things. I sit on Boards of companies ranging from early stage to over $500M annual revenue, and the one topic we always discuss is cash. No matter how much you have, you’re worried about cash flow because a shortage limits your ability to grow, pay vendors and employees, or meet debt covenants. And if you’re a small business, a mis-calculation can put you out of business or at risk of employees leaving. Here’s how it applies in storm renovation.

• Insurance Companies — this one is obvious as Insurance Companies bear the cost of storm renovation. But what I learned through diligence, is that property insurance also includes a clause that says insurance companies must provide equal alternative housing until residents are back at home. Accelerating the time to completion, even by one day, could save the insurance company hundreds of thousands of dollars. In many cases, contractors and homeowners are delayed days, or even weeks, waiting for final endorsements and payments.
• Contractors — If you’re a contractor, you might have to personally advance the capital to buy tens of thousands of dollars of supplies for a roof repair. When storm damage affects dozens of properties, the cash outlay could be hundreds of thousands. Now imagine the payments are delayed by weeks, payroll is due, and credit cards are at max capacity. The ability for contractors to get paid quickly is a huge advantage allowing them to recruit and retain better employees, take on more crews, and bid more aggressively on jobs with higher confidence of completion.
• Homeowners + Business Owners — Homeowners and business owners have a few big goals: Get the renovations done as quickly as possible, at the highest quality, and to the extent they share the costs, at a fair price. By paying contractors quickly, iink helps families get home sooner and bolsters local economies by quickly repairing damages in workplaces.

Channel Partners

Like most companies, iink’s early customers and champions are the contractors who gain the largest direct efficiencies from the platform. During diligence, it occurred to me that the game changer for iink might be if insurance companies required contractors to use iink for all repairs. So when I learned a top insurance company was preparing to pilot such an arrangement, my ears perked up. Pull demand from global partners can be a great catalyst for exponential growth and category king strategy!

Network Effects

One of the best “barriers to entry” in a software business whose source code could likely be replicated, is network effects. And in many cases, network effects play a big role in the “power law” returns Grand Ventures seeks in our early stage investments. So the possibilities of a) insurance companies rolling out iink nationally; and b) adjusters and contractors referring other sub-contractors, and vendors to iink, and all of the efficiencies gained and value created for ALL parties is super exciting. This is particularly true when the status quo involves time consuming and antiquated manual paper processes over-due for innovation.

Embedded Finance

As I’ve immersed myself in Fintech again the last 2 years, it’s exciting to see how Fintech in 2022 is fundamentally different now than it was in 2006 when I started in venture. Back then, it was nearly impossible to innovate without the support of a global bank, payment network, or payment processor. Today, thanks to Plaid and others, embedded finance companies are emerging to serve and support customers’ largest “pain points” and enable what was previously impossible.

Looking Ahead

iink is in the early days of what we hope will be a fun, adventure packed, and lucrative journey to make the entire industry more successful and profitable. If you’re a storm renovations contractor, insurance company, adjuster, or even a homeowner, make sure to check them out! If you’re a growth stage investor and passionate about the space, let us know! Mark your calendar for big things in 2023 and beyond!

P.S. If you’re a seed-stage FinTech company or a venture capitalist investing in the space, we would love to hear from you!