Founded by an expert in geography and globalization, Climate AlphaThe AI-powered platform helps property owners and investors analyze the impact of climate change on their portfolios. The Singapore-based startup announced today that it has raised $5 million in seed funding led by Jungle Ventures through its new First Cheque@Jungle program for experienced founders and operators for a second time.
Climate Alpha’s clients include institutional investors such as Oaktree Capital and BentallGreenOak and US homebuilder Lennar Corporation.
The platform uses Geographic Information System (GIS) data and economic modeling to help property owners understand the impact climate change will have on their property. It also uses public and private data streams and proprietary machine learning algorithms to create forecasts of the economic impacts of climate change.
Before founding Climate Alpha, founder Parag Khanna wrote a book titled “Mobility: Where people go for a better future‘, which looks at how climate change, geopolitical upheaval and technology are affecting where people live.
While working on the book, Khanna and his brother also began helping their parents look for climate-resistant locations to retire to. Parag asked FutureMap research director Kailash Prasad to correlate climate profiles of different locations with property value predictions. This association, called ‘Climate Oases’, began as a FutureMap practice area and in turn evolved into Climate Alpha. During the pandemic, Climate Alpha won a grant from the Singapore government to develop its data science capabilities. He also began working with real estate developers such as Lennar and Capitaland.
Khanna told TechCrunch that Climate Alpha wants to “decipher the complex interplay of geopolitics, demographics, climate change, geography and economics” (the combination of disciplines is called “spatial finance”). He adds that Climate Alpha is in many ways an extension of his “Move” thesis, supported by data science, climate modeling and econometrics.
Dr. Parag Khanna, founder and CEO of Climate Alpha
“Real estate has been moving to the right for decades, but suddenly that’s no longer the case, whether due to climate change and rising insurance, demographic outflows, high interest rates, changing investment patterns or all of the above,” Khanna said. “We model these complex interactions in ways that give greater confidence in where — and where not — to invest.”
Using data from sources such as industry standard climate models, inventory and economic data, Climate Alpha can provide detailed natural climate risk data, including forecasts and ratings, for any location in the world. It is also able to include factors such as energy grid reliability and economic dynamics, both of which can offset risk, in countries such as the United States and Canada (with an additional addition). Climate Alpha shows the expected future growth of a location’s economy and assets compared to historical trends to help investors make decisions.
For example, Oaktree Capital uses Climate Alpha’s risk and resilience score to find hotspots in its portfolio, provide investor reporting and identify future high-growth locations for investment. Atlas Capital leveraged Climate Alpha’s data to create a climate-resilient multi-asset ETF.
Climate Alpha will use its new funding to expand its research and sales teams and develop its investment service. Khanna says its goal is to “become a global platform for guiding asset managers to resilient investments in public and private markets.” It is also expanding into the insurance industry and establishing a global fund with major asset managers to invest in climate-resilient real estate.
The startup plans to raise a Series A round in the first half of 2024 that it will use to leverage data and other proprietary geospatial datasets, create a global resilience index and expand its platform to public investors.
In a statement, Jungle Ventures partner Rishab Malik said: “We are excited to support Parag in his vision to use an AI-based platform to identify climate-resilient assets for asset managers worldwide. Parag comes with the right domain expertise to solve this problem and the platform has seen some very reliable early adopters in a short period of time.”
