Climate X Secures $18M Series A After Founders Mortgage Their Home

Joining the round were existing investor Pale Blue Dot and new investors CommerzVentures, A/O, Blue Wire Capital, PT1, Unconventional Ventures, and Western Technology Investment (WTI). Climate X claims its platform can assess the climate risk for residential and commercial properties as well as infrastructure assets like roads, railways, and power grids. Their clientele includes notable names such as Legal & General, CBRE, and Virgin Money.

Before founding Climate X, both Ahmed and Kluza had extensive experience in corporate risk management. Ahmed led stress-testing and risk transformation programs at HSBC Bank and Lloyds Banking Group, while Kluza modeled risk for organizations including Barclays, MUFG, and Accenture. The inception of Climate X stemmed from their desire to apply their expertise independently.

Climate X has developed a digital twin of the Earth, incorporating over 500 trillion data points along with a proprietary library containing 1.5 billion individual assets and 44 million miles of infrastructure. This advanced platform, featuring a Google Maps-like interface, allows users to evaluate the effects of weather conditions such as extreme heat and flooding over a 100-year horizon. Clients can narrow their focus to individual properties, providing a detailed assessment of climate risks for financial services clients managing over $6.5 trillion in combined assets under management (AUM).

The journey to this point, however, was not without significant challenges. Ahmed recalled the early days when they re-mortgaged their house in Birmingham to keep the company afloat due to a lack of venture capital knowledge. "We had a house in Birmingham we re-mortgaged because we didn’t really know how to raise venture capital, and we’d hired some people," Ahmed told TechCrunch. "We were like, ‘We have to pay them!’ So that’s what we did. And then luckily, after saying no three or four times, eventually Pale Blue Dot said yes. They put in a small check, and that check suddenly grew into another conversation to leading the seed round."

Ahmed's career path is notably unconventional. Without a university education, he worked various retail and call center jobs before joining HSBC, where he became involved in M&A and eventually moved to Hong Kong. There, he built the bank’s stress-testing function, applying macroeconomic shocks to the balance sheet and P&L across different regions. However, feeling that the corporate world was too limiting, he returned to London in 2017, where he worked for Accenture and met Kluza. Reflecting on their experience at Accenture, Ahmed said, “I basically said to him, ‘Let’s go and do this for ourselves because, you know, Accenture is taking 60% of our work, and what are we doing?’”

Robert Bernard, chief sustainability officer at CBRE, commented on the partnership with Climate X, stating, "After a year of assessment of many many tools and services, we are […] working with Climate X to help our clients understand and prepare for the risks associated with climate change."

The climate adaptation market, valued at around $2 trillion according to the World Economic Forum, offers substantial opportunities for companies like Climate X. The company’s innovative approach and advanced technology position it well to capitalize on this growing market.

Climate X's founders have navigated their company through significant hurdles to establish it as a key player in climate risk modeling, reflecting both their dedication and the pressing need for scalable solutions in the financial services sector.