Climate X Raises $18 Million in Series A Funding Round

UK Climate risk intelligence startup company Climate X has just raised $18 million in their Series A funding round.

Until now, most of the most popular software platforms in the ClimateTech sector have focused on regulatory disclosure, offsets, removals, and carbon accounting. For instance, Persefoni (accounting) in New York has raised $164.2 million to date, Plan A (accounting/monitoring) in Berlin has raised $43 million, and Supercritical (removals) and CUR8 (removals) have raised $15.8 million and 6.7 million, respectively. The space is both extensive and diverse, as is evident.

However, one sector that briefly emerged before being consumed by acquisitions was assessing climate risk to physical assets. Climate X, a UK-based venture specializing in climate risk intelligence, is again seeking to exploit this lucrative resource. It has secured a $18 million Series A round, headed by GV (Google Ventures). The objective is to assist financial institutions in evaluating the effects of climate change on their tangible asset portfolios.

Pale Blue Dot, CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures, and Western Technology Investment (WTI) were early backers.

There is a reasonable amount of room to operate in the climate adaptation market, estimated to be worth approximately $2 trillion by the World Economic Forum and other organizations.

Climate X asserts that its platform can generate risk assessments for residential and commercial properties as well as road, rail, and power infrastructure. Legal & General, CBRE, Virgin Money, and Federated Hermes comprise its clientele.

It follows a path that other acquired businesses have previously walked. Four Twenty-Seven was acquired by Moody’s. S&P Global acquired The Climate Service.

Climate X was nearly a non-occurrence until it was co-founded by CEO Lukky Ahmed and CPO Kamil Kluza, who had previously worked in corporate risk management.

“We had a house in Birmingham that we refinanced because we were unsure how to raise venture capital. We had hired some individuals, and we were like, ‘We have to pay them!'” Consequently, that is what we did. Fortunately, Pale Blue Dot eventually agreed to the proposal after declining it three or four times. They submitted a modest check, which unexpectedly evolved into an additional discussion regarding the seed round.

Lukky Ahmed, the CEO and co-founder, “absorbed numerous lessons regarding fundraising.”

HSBC Bank and Lloyds Banking Group were among the organizations Lukky had previously directed to develop risk transformation programs and stress testing.

However, he disclosed that his journey to tech entrepreneurship was lengthy: “I did not attend university.” I was still determining my intentions. I was ultimately employed in a variety of retail and contact center positions. After joining HSBC, I became involved in M&A and eventually relocated to Hong Kong to establish the stress testing function. The bank applied macroeconomic disruptions to the balance sheet P&L across various regions.

He returned to London in 2017, where he eventually joined Accenture and encountered Kluza, as he was aware that the world was much larger than his job at a bank. Kamil Kluza, the co-founder and CPO, had previously modeled risk for organizations such as Accenture, MUFG, and Barclays. “I essentially told him, ‘Let’s go and do this for ourselves because Accenture is taking 60% of our work, and what are we doing?'”

The pandemic commenced in 2020. “I enrolled in Clubhouse, and I encountered Hampus Jakobsson of the pale blue dot in one of the rooms because I overheard the individuals in Clubhouse discussing Twitter and their enthusiasm for tweeting about the world outside of Clubhouse.” So I tweeted him and entered his DMS, and the situation escalated.

Recognizing the necessity for more scalable climate risk modeling in financial services, the duo constructed a Digital Twin of the Earth. This model is based on over 500 trillion data points and includes a proprietary library of 1.5 billion individual assets and 44 million miles of infrastructure.

The Climate X platform provides a Google Maps-like experience, enabling clients to examine the consequences of extreme temperatures and flooding over a 100-year time horizon, down to the level of a single-family home. It currently evaluates climate risk for financial services clients with a combined AUM exceeding $6.5 trillion.

“The team is exceptional,” Lukky stated, “which is why the team raised the Series A with GV in the lead.”

In a statement, Robert Bernard of CBRE stated, “We are collaborating with Climate X to assist our clients in comprehending and preparing for the risks associated with climate change, following a year of evaluation of numerous tools and services.”

Climate X will utilize the new funding to expedite its expansion in Europe, North America, and APAC.