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Climate risk intelligence firm Climate X has secured $18 million in a Series A funding round led by Google Ventures (GV), with participation from Pale Blue Dot, CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures, and Western Technology Investment (WTI). This investment aims to accelerate the company's global mission of aiding financial organizations and asset managers in assessing climate risks to their building and infrastructure portfolios.
Climate X plans to utilize the funds to expand its presence in Europe, North America, and the Asia Pacific. The initial focus will be on bolstering the commercial team at its new New York office to meet the growing demand from financial institutions, global asset managers, and real estate investors in the region.
Headquartered in the UK, Climate X provides data analysis to clients such as Legal & General, CBRE, and Virgin Money, assisting them in protecting their portfolios and crafting new investment strategies amidst rising climate-related risks. The company's proprietary financial insights evaluate the impact of climate risks on physical asset valuations, covering residential and commercial properties, as well as critical infrastructure like roads, railways, and power systems.
Climate X's platform, described as "as easy to navigate as Google Maps," allows clients to model the likelihood of 16 different climate hazards—including extreme heat, tropical cyclones, and flooding—across eight warming scenarios over a century. This detailed analysis helps clients anticipate potential impacts on individual assets and make smarter investment and portfolio management decisions amid increasingly stringent regulations on climate risk exposure.
The platform translates these climate risks into expected annual losses, enabling clients to assess the ROI of various climate adaptation measures through 22 different interventions. Additionally, Climate X is enhancing its platform by incorporating new data sources to stay aligned with evolving commercial and regulatory demands.
Co-founded by CEO Lukky Ahmed and Chief Product Officer Kamil Kluza, Climate X addresses the need for robust and scalable climate risk modeling in the financial services sector. The platform leverages a combination of 'Digital Twin of the Earth' data systems, AI, and over 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 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 funding news, 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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