When it comes to building climate tech software, it may initially make sense to work on something close to carbon accounting, as the most popular software companies in the space have something to do with accounting, offsets, deletions or regulatory disclosure. A look at the sector’s startups reveals where investors are interested: New York’s Persefoni (accounting) has raised $164.2 million to date; Plan A (accounting/monitoring) in Berlin raised $43 million; Supercritical (takedowns) grossed $15.8 million, and CUR8 (takedowns) grossed 6.7 million.
But there is one niche in this sector that only existed for a short time before it was swallowed up by a wave of mergers and acquisitions: assessing the climate risk of physical assets. To mine that rich seam once again, British startup Climate X is now coming out of stealth with a cool $18 million Series A round led by GV (Google Ventures). The startup aims to help financial organizations assess the impact of climate change across their physical asset portfolios, and will use the new funding to expand across Europe, North America and APAC.
Existing investor Pale Blue Dot also participated in the round, alongside CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures and Western Technology Investment (WTI).
The startup claims its platform can assess the climate risk of both residential and commercial properties, as well as road, rail and electricity infrastructure. Clients to date include Legal & General, CBRE and Virgin Money.
Founded by corporate risk veterans Lukky Ahmed (CEO) and Kamil Kluza (COO), Climate For example, Four Twenty Seven made progress in assessing the impact of climate change on cities and infrastructure before it was bought by Moody’s, while The Climate Service helped companies factor climate risks into their decisions and was eventually bought by S&P Global.
Still, according to the World Economic Forum, the climate adaptation market is said to be worth around $2 trillion, so Climate
Realizing that the financial services industry needed more scalable climate risk models, Ahmed and Kluza built a digital twin of the Earth, using more than 500 trillion data points, as well as a proprietary library of 1.5 billion individual assets and 70 million kilometers of infrastructure . .
With a Google Maps-like interface, Climate The platform now assesses climate risk for financial services clients with combined assets under management of more than $6.5 trillion, Ahmed said.
But Climate X almost didn’t happen.
“We had a house in Birmingham that we remortgaged because we didn’t really know how to raise venture capital, and we had hired some people,” Ahmed told TechCrunch. “We thought, ‘We have to pay them!’ So we did that. And then thankfully, after saying no three or four times, Pale Blue Dot finally said yes. They did a little check, and that check suddenly grew into another conversation to lead the seed round. “
Since then, Ahmed says, he’s taken “a lot of fundraising classes.”
Ahmed previously led stress testing and risk transformation programs for HSBC Bank and Lloyds Banking Group, but he says tech entrepreneurship didn’t come easily or quickly. “I didn’t go to university; I didn’t know what I wanted to do. I ended up in various jobs in retail and call centers,” he says. “After joining HSBC, I got involved in mergers and acquisitions and eventually moved to Hong Kong, where I set up the stress testing function, where the bank took macroeconomic shocks and applied them to the balance sheet and profit and loss account across different regions.”
But Ahmed felt the world was bigger than just working for a bank, so he returned to London in 2017, where he eventually worked for Accenture and met his co-founder Kluza, who had modeled risk for organizations such as Barclays, MUFG and Accenture. Ahmed recalled, “I actually said to him, ‘Let’s go do this for ourselves, because you know, Accenture is taking 60% of our work, and what do we do?'”
Ahmed said Climate
“After a year of assessing many tools and services, we are here […] working with Climate