London-based Climate X, a climate risk intelligence company, announced that it has raised $18M (approximately €16.81M) in a Series A round of funding to accelerate its global expansion.
The funds will help financial organisations price the impact of climate change on their physical asset portfolios.
The round was led by GV (Google Ventures), with support from Pale Blue Dot, CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures, and Western Technology Investment (WTI).
Paul Morgenthaler, Managing Partner at CommerzVentures, says, “With the escalating risk of floods, heatwaves, wildfires, and other climate impacts, physical risks to properties are growing exponentially. Real estate as the world’s largest asset class is increasingly mispriced.”
“Climate X provides one of the very few tools to quantify them adequately, while enabling ROI-based adaption for individual properties. In addition to complying with mandatory climate risk disclosures, Climate X’s customers get immediate business value.”
“The market opportunity is massive, and Climate X have assembled the leading team in the market.”
A climate risk data analytics platform
Climate X provides financial insights into how climate risks are likely to affect the valuation of physical assets, including residential and commercial properties, as well as road, rail, and power infrastructure.
The company’s data analytics platform is used by “world-leading” financial institutions and asset managers like Legal & General, CBRE, Virgin Money, and Federated Hermes for informed investment decisions amid tightening climate risk regulations.
Climate X was co-founded by CEO Lukky Ahmed and COO Kamil Kluza, bringing over 30 years of combined corporate risk management experience.
Ahmed has led stress testing and risk transformation programmes at HSBC Bank and Lloyds Banking Group, while Kluza has modelled risk at Barclays, MUFG, and Accenture, and contributed to designing the first tranche of contingent convertible (CoCo) bonds.
Recognising the need for scalable climate risk modeling in financial services, Ahmed and Kluza founded Climate X. Their approach combines Digital Twin of the Earth, physics, and AI, leveraging over 500 trillion data points, including a library of 1.5 billion assets and 44 million miles of infrastructure.
Co-founder Ahmed, says, “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 $6.5T 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.”
The company’s platform enables clients to model the future probability of 16 climate hazards across eight warming scenarios over a 100-year horizon, down to the level of individual assets.
Climate X’s tech translates these risks into expected annual losses, empowering clients to assess the return on investment (ROI) for preemptive climate adaptation. It offers insights into 22 different intervention strategies to mitigate climate risks effectively.
CO-founder Kluza, adds, “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.”
Capital utilisation
Climate X plans to use the new funding to accelerate expansion across Europe, North America, and Asia–Pacific (APAC).
The focus will be on scaling the commercial team in its newly established New York office to meet increasing demand from major financial institutions, global asset managers, and real estate investors.
Additionally, the company aims to enhance its products to align with evolving commercial and regulatory needs by integrating additional data sources into its platform.
Roni Hiranand, Principal at GV, says, “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.”
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