An aerial view of repair vehicles at sunset passing near beachfront homes that burned in the Palisades Fire as wildfires cause damage and loss through the LA region on January 15, 2025 in Malibu, California.
Mario Tama | Getty Images
Midway through December, tech entrepreneur Dan Preston debuted insurance startup Stand’s first product focused on protecting property in wildfire zones. He should have had months to work with prospective customers and to market the offering before any catastrophic fires hit the U.S.
In California, Stand’s home state, fire season normally lasts from early summer through October or November. Stand, which Preston co-founded early last year, announced a $30 million financing round and the new product on Dec. 16, a few days before the official start of winter.
But it’s been a winter like no other. Three weeks after Stand’s launch, wildfires ravaged parts of Los Angeles, killing more than two-dozen people, scorching about 41,000 acres due to extreme winds and destroying at least 12,300 structures.
“This is certainly not a time you would normally see events like this,” Preston said in an interview this week. “It has put an accelerant on business in a pretty massive way. As soon as this stuff started happening, the inbound demand was about 5-10x overnight.”
Preston has been trying to innovate within the typically boring and slow-moving insurance industry for well over a decade. In 2013, he became technology chief at auto insurance upstart Metromile, and later took on the role of CEO, guiding the company into the public market in 2020 through a special purpose acquisition company (SPAC). Metromile hit a rough patch after its SPAC and sold to tech-powered insurer Lemonade in 2022. Preston stayed on at Lemonade for another year.
At Stand, Preston is aiming to go big in a market that legacy insurers are rapidly abandoning because it’s viewed as too risky. As of mid-2024, at least eight insurance carriers had left the state or limited their exposure. The California FAIR Plan, generally viewed as an insurer of last resort, had seen a 137% increase since 2019, and that was well before the latest LA fires began. According to LendingTree, about 10% of homes in Los Angeles are uninsured.
It’s not a surprise that firms are exiting the state. Goldman Sachs estimates that insurers could face up to $30 billion in losses tied to the LA. fires.
Through a combination of technology and a reimagining of home insurance, Preston wants to offer reasonably priced protection to homeowners in wildfire zones.
Stand CEO Dan Preston, who was previously CEO at Metromile
Winni Wintermeyer
For property owners, the key piece is recognizing that they have to make changes to their homes and the surrounding land so that fires are less likely to spread out of control. That could include pruning trees, replacing wood fencing with steel or adding concrete barriers between homes. Stand uses artificial intelligence and what it calls “physics-driven insights tailored to each property” to make specific mitigation recommendations that can make a property insurable.
Preston said the company, which currently has 13 employees, has only insured a few properties so far, but is in talks with hundreds of potential customers. That number is increasing dramatically, he said, as property owners start to understand the consequences of the LA fires.
“It will be a lot harder for folks to find insurance the next couple years because of this event,” Preston said. “In some ways, we have have a responsibility to level up our ambitions, bringing insurance back to the market.”
Navigating the bottlenecks
Bill Clerico, one of Stand’s co-founders and initial investors, was expecting a busy January, but for very different reasons. He and his wife just had their second child. And on Jan. 7, Clerico’s fire-tech focused venture firm, Convective Capital, filed to raise $75 million for its second fund.
Clerico said he can’t talk about Convective’s fundraising at the moment, but he is using the disaster to try to raise awareness about strategies for wildfire mitigation and some of the tools and technologies that are available. In a post on X on Jan. 8, Clerico wrote that four keys to dealing with wildfires are forest and fuel management, rapid detection using cameras and satellites, “hardening” of homes and communities, and reducing fires caused by utilities.
“The bottlenecks are mostly around adoption and deployment — a lot of these technologies are not cutting-edge stuff,” Clerico said in an interview. “Drones have existed for decades, satellites for decades. It’s cameras and software, which found its way into every aspect of society expect public safety.”
Before launching Convective three years ago, Clerico was co-founder and CEO of fintech startup WePay, which he sold to JPMorgan Chase in 2017. He then spent over three year’s as a managing director for the bank in the Bay Area,
Stand simulation
Stand
Clerico lives in San Francisco and has a cabin in Anderson Valley, about 115 miles north of the city. He said that a wildfire there in 2018 inspired him to volunteer at the local fire department and was a factor in leading him to start investing in the space.
While VCs have poured into clean tech in recent years, they’ve mostly avoided investing in companies focused on resiliency and adaptation, in large part because the buyers are “pretty large slow-moving institutions, like utilities, government and insurance,” he said.
Clerico said that what’s unique about Stand relative to other tech startups that have tried to crack insurance is that competition in its target market is dwindling rather than increasing.
“Existing insurers don’t compete, they’re exiting,” Clerico said. “if you can have better informed view on risk, it’s a much more favorable place for a startups.”
Still, it’s an extremely tough market.
Stand is currently focused on homes that are worth $2 million to $10 million, which Preston said covers properties facing a lot of “distress.” The company is working with a number of reinsurers and expects to be able to bring costs down as it proves the model can work.
But making a meaningful contribution to the bigger problem will require significant behavioral and structural changes in neighborhoods that, like Pacific Palisades in LA, are suddenly at risk of almost disappearing overnight. The mission has to go well beyond protecting individual homes one at a time.
“We might be able to play a much larger role in the state of safety if we can work with neighborhoods, and require homeowners and city officials to design neighborhoods to be more resilient,” Preston said.
Anduril, the defense-tech startup founded by Palmer Luckey, has signed a term sheet to raise capital at a $28 billion valuation, according to people familiar with the matter.
The company is planning to raise up to $2.5 billion in the round, said the people who asked not to be named because the details are confidential. The latest funding would double Anduril’s valuation from August.
Anduril, the three-time CNBC Disruptor 50 company that ranked No. 2 in 2024, aims to disrupt traditional defense contractors like Lockheed Martin, Raytheon and Northrop Grumman by developing its own products and selling them to clients, in contrast to the traditional military process of contracting and then building.
An Anduril spokesperson declined to comment.
Luckey, who sold virtual reality company Oculus to Facebook for $2 billion in 2014, has been a public supporter of Donald Trump since long before the president’s return to the White House.
“I’ve been on the tech-for-Trump train for longer than just about anyone,” Luckey, who started the company in 2017, told CNBC’s “Closing Bell Overtime” on Nov. 6, right after Trump’s election victory. “The idea that we need to be the strongest military in the world is really non-partisan.”
It’s part of a broader and controversial trend of AI companies walking back bans on military use of their products and entering into partnerships with defense companies and the U.S. Department of Defense. In December, Anthropic and Palantir announced a partnership with Amazon Web Services to “provide U.S. intelligence and defense agencies access” to Anthropic’s AI models.
While Anduril is still privately held, Palantir, which sells software and services to defense agencies, is publicly traded and has been one of the best performers on the stock market in the past year, jumping 370% over that stretch, lifting its market cap past $250 billion. The company reported in its latest earnings report this week that government revenue jumped 45% from a year earlier to $343 million.
Peter Thiel’s Founders Fund is leading the latest Anduril financing, with a $1 billion commitment, sources said, the largest check ever for the firm. Thiel, who was a major Trump supporter in the 2016 campaign, is one of Palantir’s co-founders. Trae Stephens, a partner at Founders Fund, is an Anduril co-founder.
Anduril’s revenue in 2024 doubled to about $1 billion and annual contract value reached $1.5 billion, the people said.
In 2023, Anduril launched several new drones that rely on its Lattice AI-powered command and control software used by the U.S. military and allies to direct human-assisted robotics systems to perform complex missions.
The New York Stock Exchange with a Hims & Hers Health banner is pictured in the Manhattan borough of New York City.
Carlo Allegri | Reuters
Hims & Hers is facing scrutiny from lawmakers over what they claim is a “misleading” advertisement for its weight loss offerings that’s slated to run during the Super Bowl on Sunday.
Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) wrote a letter to the U.S. Food and Drug Administration on Friday expressing concerns over an “upcoming advertisement” that “risks misleading patients by omitting any safety or side effect information when promoting a specific type of weight loss medication.”
The Hims & Hers ad, which the company released online in late January, is called “Sick of the System” and sharply criticizes the $160 billion dollar weight loss industry. It shows visuals of existing weight loss medications known as GLP-1s, including injection pens that look like Novo Nordisk’s blockbuster diabetes drug Ozempic.
The ad claims those drugs are “priced for profits, not patients,” and points to Hims & Hers’ weight loss medications as “affordable” and “doctor-trusted” alternatives.
“We are complying with existing law and are happy to continue working with Congress and the new Administration to fix the broken health system and ensure that patients have choices for quality, safe, and affordable healthcare,” a Hims & Hers spokesperson told CNBC in a statement.
The senators do not mention Hims & Hers by name in their letter, but they do reference some of the visuals in the ad, including “imagery of an injection pen with distinctive characteristics reflective of an existing brand-name medication.”
“Nowhere in this promotion is there any side effect disclosure, risk, or safety information as would be typically required in a pharmaceutical advertisement,” the senators wrote. “Further, for only three seconds during the minute-long commercial does the screen flash in small, barely legible font, that these products are not FDA-approved.”
Hims & Hers began offering compounded semaglutide through its platform in May after launching a new weight loss program in late 2023. Semaglutide is the active ingredient in Ozempic and Wegovy, which can each cost around $1,000 a month without insurance.
Shares of Hims & Hers jumped over 170% last year, thanks to soaring demand for GLP-1s. They rose another 8% on Friday, lifting the company’s market cap to about $9.5 billion.
Compounded GLP-1s are typically much cheaper and can serve as an alternative for patients that are navigating complex supply hurdles and spotty insurance coverage. Hims & Hers sells compounded semaglutide for under $200 a month.
The FDA doesn’t review the safety and efficacy of compounded products, which are custom-made alternatives to brand drugs designed to meet a specific patient’s needs. Compounded products can also be produced when brand-name treatments are in shortage.
Semaglutide is currently in shortage, according to the FDA.
Sens. Durbin and Marshall said that advertisements for brand-name GLP-1 medications include “significant risk disclosures to patients about side effects and contraindications, including warnings about potential gallbladder, pancreas, vomiting, diarrhea, and other implications.”
A release on Durbin’s website says that the ad in question appears to exploit a loophole “regarding promotions of compounded drugs by telehealth companies.”
The senators said they believe the FDA may have the authority to take enforcement actions against marketing that could mislead patients, and they plan to introduce new legislation to address regulatory loopholes.
Employees package and sort express parcels at an e-commerce company on Nov. 1, 2024, around the Double 11 Shopping Festival in Lianyungang, Jiangsu Province of China.
Vcg | Visual China Group | Getty Images
President Donald Trump signed an executive order on Friday that puts a pause on his closing of the de minimis trade exemption, a provision commonly used by Chinese e-commerce companies Temu and Shein.
The order states that de minimis will be restored for small packages shipped from China, “but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue” on those items.
Trump on Saturday suspended the exemption as part of new tariffs that include an additional 10% tax on Chinese goods. The nearly century-old exception, known as de minimis, has been used by many e-commerce companies to send goods worth less than $800 into the U.S. duty-free, creating a competitive advantage.
It was predicted that its removal could overwhelm U.S. Customs and Border Protection employees, as the mountain of low-value shipments already making their way into the U.S. would suddenly require formal processing.
De minimis has helped fuel an explosion in cheap goods being shipped from China into the U.S. CBP has said it processed more than 1.3 billion de minimis shipments in 2024. A 2023 report from the House Select Committee on the Chinese Communist Party found that Temu and Shein are “likely responsible” for more than 30% of de minimis shipments into the U.S., and “likely nearly half” of all de minimis shipments originate from China.
Critics of the de minimis provision say it’s provided an unfair advantage to Chinese e-commerce companies, and created an influx of packages that are “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.
The Biden administration proposed a new rule last September to curb the “overuse and abuse” of de minimis. The rule proposes to strengthen the CBP’s information collection requirements for de minimis shipments.