A Toronto-based software startup says it wants to become the leading technology platform for the home warranty industry, and it has raised $6.3 million USD — about $9 million CAD — in previously undisclosed seed funding to do it.
The company, called Polygrade, emerged from stealth this week, according to BetaKit. It sells software that uses agentic AI to cut the time and cost of handling warranty claims for warranty companies, suppliers and service providers across the United States.
From faster contractor payments to full claims handling
Polygrade launched about a year and a half ago under the name ProPay, initially focused on helping contractors get paid faster. The startup recently rebranded to reflect a broader ambition: improving the entire warranty claim process, from diagnosis to resolution.
The seed funding came in two tranches, both raised through simple agreements for future equity. An initial $3.3 million USD round closed in early 2025 with backing from American Family Ventures, Nine Four Ventures, Hustle Fund, Room and Pillar, followed by a $3 million USD cheque from Construct Capital in July, BetaKit reported.
The company plans to use the capital to grow its seven-person team, hiring forward-deployed engineers to help new clients integrate its technology, along with go-to-market staff as it moves beyond founder-led sales.
AI agents with guardrails
Servicing a home warranty — repairing a broken fridge, for example — can involve extensive communication, paperwork and repeat visits. Polygrade says its AI agents can automatically gather information from homeowners, make recommendations, source parts, process invoices and facilitate contractor payments.
The use of AI in claims processing has drawn criticism elsewhere, with insurance claims adjusters complaining the technology can lead to misclassifications and unfair automated denials. Polygrade co-founder and CEO David Steckel told BetaKit the company's approach does not give AI "unrestricted authority to make claims decisions," saying its agents operate within warranty companies' existing rules and escalate anything beyond those parameters for human review.
He said the platform was designed to make its recommendations traceable rather than operate as a black box, and that clients can choose how much automation they adopt. Steckel claimed the warranty tech space remains "a generation or two behind" field service management and insurance, and that "there is not yet a global leader that's solving for a warranty-specific use case."
Local roots, US customers
Steckel began his career as a custom homebuilder before founding Setter, a Toronto home management software startup acquired by Thumbtack in 2020. He later joined Sears Home Services, where he worked alongside co-founders Eui Chung, now Polygrade's chief technology officer, and Kaustubh Vongole, head of product. The three teamed up with other former Setter, Thumbtack and Sears Home Services colleagues to launch the company.
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."
Polygrade says its industry experience has already helped it land two of the five largest warranty firms in the United States as customers within its first year. Over time, the company sees room to expand into other warranty products and to bring its services to the Canadian market once it has proven itself south of the border.
