Climate X raises $18m to project and price climate risks

Climate risk intelligence company Climate X has raised $18 million to accelerate its global expansion and help the world’s leading financial organisations price the impact of climate change across their physical asset portfolios.

GV (Google Ventures) led the Series A investment round, supported by Pale blue dot, CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures and Western Technology Investment (WTI).

One of the fastest-growing players in the $2 trillion climate adaptation market, UK-headquartered Climate X offers proprietary financial insights into the likely impact of climate risks on physical asset valuations, from residential and commercial properties to road, rail and power infrastructure.

Climate X’s data analytics platform is trusted by world-leading financial institutions and asset managers – including Legal & General, CBRE, Virgin Money, and Federated Hermes – to enable smarter investment and portfolio management decisions, against a backdrop of tightening regulations regarding capital requirements related to climate risk exposure.

Climate X was co-founded by CEO Lukky Ahmed and COO Kamil Kluza, who have over 30 years of combined corporate risk management experience. Lukky has led stress testing and risk transformation programmes for organisations like HSBC Bank and Lloyds Banking Group, while Kamil has modelled risk for organisations such as Barclays, MUFG, and Accenture and was involved in designing the first-ever tranche of coco bonds.

Recognising an unmet need for more defensible and scalable climate risk modelling in financial services, the duo set about building the technology behind Climate X. Their unique risk assessment model uses a combination of Digital Twin of the Earth, physics and AI, underpinned by more than 500 trillion data points, including a proprietary library of 1.5 billion individual assets and 44 million miles of infrastructure.

Lukky Ahmed, CEO at Climate X, said: “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 $6.5 trillion in combined AUM. 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.”

As easy to navigate as Google Maps, the Climate X platform allows clients to model the future likelihood of 16 different climate hazards – from extreme heat to tropical cyclones and flooding – across eight warming scenarios over a 100-year time horizon, right down to the individual asset level.

Translating these risks into expected annual losses, Climate X’s technology then allows clients to determine the ROI of taking pre-emptive climate adaptation action based on a range of 22 different interventions.

Kamil Kluza, COO at Climate X, said: “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. 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.”

Climate X’s 50-strong team includes technologists, scientists, and sales leaders from world-leading organisations such as Amazon Prime, Monzo, HSBC, and Mozilla. The company is advised by financial services and real estate luminaries, including Robert Wigley, former Chair of UK Finance, Jackie Bennett, Chair of the Bank of England’s Residential Property Forum, and David Carlin, Head of Risk at the UN Environment Programme Finance Initiative.

Climate X will use the new funding to accelerate its expansion in Europe, North America, and APAC. It will initially build out the commercial team in its recently opened New York office to service growing customer demand across the region from major financial institutions, global asset managers and real estate investors. The company will also look to augment its products in line with evolving commercial and regulatory requirements by incorporating additional data sources into its platform.

Roni Hiranand, Principal at GV, said: "Climate X is 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. 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."