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Google Ventures leads Series A funding round for data analytics platform that calculates the likely impact of climate risks on physical asset valuations
Climate risk intelligence company Climate X has today announced it has raised $18m to accelerate its global mission to help financial organisations and asset managers assess the climate risk to their building and infrastructure portfolios around the world.
The Series A investment round was led by Google Ventures (GV) and was supported by Pale blue dot, CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures, and Western technology Investment (WTI).
The company said the funding will be used to accelerate the company's expansion in Europe, North America, and Asia Pacific regions.
Climate X said it will initially focus on building out the commercial team in its recently opened New York office to serve growing demand from the region from financial institutions, global asset managers, and real estate investors.
UK-headquartered Climate X offers support to financial institutions and asset managers by providing data analysis to clients such as Legal & General, CBRE, and Virgin Money to help them protect their portfolios and develop new investment strategies in response to growing climate-related risks.
Its advice includes proprietary financial insights into the likely impact of climate risks on physical asset valuations, including residential and commercial properties, and road, rail, and power infrastructure.
Climate X said its analysis helps enable smarter investment and portfolio management decisions, against a backdrop of tightening regulations regarding capital requirements related to climate risk exposure.
It describes its platform as being "as easy to navigate as Google Maps", adding that it allows clients to model the future likelihood of 16 different climate hazards - including extreme heat, tropical cyclones, and flooding - across eight warming scenarios over a 100 year time horizon, providing insight into the potential impacts on individual assets.
Climate X explained it then translates these risks into expected annual losses to allow its clients to determine the Return on Investment (ROI) of deploying pre-emptive climate adaptation measures based on a range of 22 different interventions.
It is also working to augment its products in line with evolving commercial and regulatory requirements by incorporating additional data sources into the platform.
Climate X was co-founded by chief executive Lukky Ahmed and chief product officer Kamil Kluza. The founders said they created the platform having recognised a need for more defensible and scalable climate risk modelling in the financial services sector.
They explained their risk assessment model uses a combination of 'Digital Twin of the Earth' data systems, AI, and more than 500 trillion data points, including a proprietary library of 1.5 billion individual assets and 44 million miles of infrastructure.
"In just over one year since going to market, Climate X has become one of the world's fastest growing providers of physical climate risk data and analytics, driving value for global financial services clients with over $6.5tr in combined assets under management (AUM)," said Ahmed.
"Assessing the impact of physical climate risk on asset valuations and business operations is now a necessity, not a nice-to-have. By demonstrating how our workflow solutions can drive both top and bottom-line growth, we have redefined physical climate risk solutions from mere compliance tools to competitive advantages that enhance business outcomes for our customers and their clients."
Kluza said the company was serving a market that is poised for rapid growth. "The climate adaptation market will be a vital economic enabler in the years ahead, yet to date, it has been dominated by expensive consultancies reliant on manual human analysis and black box solutions that reduce climate risk to a single rating or score," he said.
"We're breaking the mould with technology designed to drive business value by helping our clients answer critical questions about their asset portfolios and investment strategies: where to buy, where to sell, how to build portfolio resistance, reduce insurance premiums and protect asset values."
Roni Hiranand, principal at GV, welcomed the news of the funding, hailing Climate X as "a game-changer that accurately quantifies and addresses the impact of climate risk".
"We're impressed with Kamil Kluza and Lukky Ahmed's deep expertise in corporate risk management and believe they have the right skill set to create a next-generation climate risk intelligence product," he added. "We're excited to support the Climate X team as they work towards a vision of becoming the backbone for all climate risk-related decision-making within financial organisations."
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