TLDR:
– Climate risk software startups are receiving significant funding for their digital tools.
– Arbol and AiDash recently closed on a combined $118.5 million for climate risk management solutions.
In a world facing increasing climate-related challenges like hurricanes and droughts, software cannot prevent these disasters but can help in understanding and mitigating climate risks. This has led to significant investments in startups focused on developing digital solutions for climate-risk management. Recently, Arbol and AiDash, two U.S.-based companies, secured a total of $118.5 million in funding for their businesses centered around managing insurance for climate-related damage and tracking climate risk for critical infrastructure.
Arbol, based in New York, raised $60 million in a Series B funding round to accelerate insurance payments using climate data and eliminate in-person inspections for damage assessment. On the other hand, Silicon Valley-based AiDash closed a $58.5 million Series C round to offer AI-enabled software that helps utilities and infrastructure-heavy industries protect against climate risk using satellite data.
The significant market opportunity for climate risk tools is evident from the $380 billion in economic losses caused by 398 global natural disaster events in 2023. This number is expected to rise, with forecasts suggesting that global climate change damage could cost between $1.7 trillion and $3.1 trillion per year by 2050. Despite the enormity of these figures, venture funding for climate risk startups, totaling over $930 million for 20 companies in recent years, indicates growing investor interest in this space.
With extreme weather events becoming more common, weather-related startups, such as Tomorrow.io, are seeing substantial funding activity. Furthermore, the convergence of insurtech and climate analytics is evident through companies like Zesty.ai and Demex, providing property risk analytics and climate risk reinsurance, respectively. These recent funding trends demonstrate sustained investor interest in climate risk solutions, with significant room for growth in the sector.
