London-based climate risk analytics provider, Climate X, has today raised an additional €5 million as part of its mission to deliver actionable insights about climate change related-risks. The young startup launched its platform Climate X Spectra in December 2021.
This new wave of funding, after receiving €1.3 million in July 2021 was led by CommerzVentures and A/O PropTech, joined by Voyagers Climate Tech Fund, Blue Impact Ventures, Deloitte LLP and angel investors including David Rowan (founding Editor-in-Chief at WIRED), Kat Borlongan (former Director at La French Tech) and Renaud Visage (co-founder and former CTO at Eventbrite).
Founded in 2020, Climate X projects location-specific risks and the associated losses from extreme weather events linked to climate change. The result is tech that is capable of giving insights into the risk for locations for decades into the future, empowering decision-makers to make decisions with greater awareness.
While there can be no doubt about the prevalence of climate change and the risk this poses for future life, it’s reported that climate change-related risks could cost the global economy up to $23 trillion by 2050, disproportionately impacting marginalised communities.
Paul Morgenthaler, Managing Partner at CommerzVentures said: “Climate X is a standout example of a Climate FinTech that is solving a multi-trillion-dollar problem for the financial industry. This exceptional team has produced a vital tool capable of delivering insights into climate change-related risks for global real estate. They’re enabling decision-makers to place climate mitigation and resilience at the heart of their strategy, delivering the visibility that is essential to creating a sustainable business model. We look forward to working with the team as they accelerate their platform’s expansion internationally.”
The UK Government has already announced mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs, enforceable for financial reporting periods starting on or after 6th April 2022. Financial institutions are also attempting to quantify their exposure to climate risks following similar regulatory requirements introduced by the Bank of England – a tall order for even the most capable internal teams.
One key challenge is that the data and tools to assess and manage climate change-related risks have been historically limited and have struggled to meet the increasingly sophisticated needs of customers and regulators.
Climate X addresses this market gap by providing the advanced tools necessary to meet these statutory requirements. The startup is on an impact-based mission that delivers location-specific risk ratings and loss estimates for extreme weather events linked to climate change through to the year 2100, under multiple warming scenarios.
Gregory Dewerpe, founder of A/O PropTech added: “Accurately quantifying exposure to climate risk is now an economic, statutory, and moral necessity. Without concerted action, extreme weather events have the potential to cost trillions of dollars to the global economy. The built world will bear the brunt of this. Climate X’s platform gives a range of actors across many industries the tools they need to understand, assess, predict and report the exposure of their physical assets to ecological challenges – and in doing so enable them to start planning and investing accordingly to reduce future losses and pain.”
At the end of 2021, Climate X released Spectra as an on-demand climate risk data analytics platform available through an online platform or API data feed. The platform acts as a vertically integrated solution that covers a comprehensive range of hazard types and achieves up to 95% performance accuracy.
In an era of climate uncertainty, the company wants to enable stability and transparency with its ‘glass box’ approach. Firms can use either solution to quickly and securely access over one trillion data points tied to millions of locations anywhere in the UK. Spectra enables firms to meet regulatory compliance and build resiliency by incorporating climate change-related risks into business decisions, pricing and investment strategies.
This fresh funding boost will be used to meet increasing demand and expand the product offering.
Lukky Ahmed, co-founder and CEO at Climate X commented: “This investment accelerates our ability to scale our climate risk analytics solution, Spectra, and to smoothen the path for governments and businesses worldwide to use data they understand and trust to make multi-generational climate-informed decisions. We’re excited to enter the next phase of our journey with some of the best strategic investment partners in the world.”