Formerly known as Weatherbill, The Climate Corporation is announcing its $50 million Series C round today, led by new investor Founders Fund and followed on by existing investors Khosla, Google Ventures, NEA, Index Ventures and Atomico. The round comes after another formidable $42 million raise from the aforementioned group sans Founders Fund.
While on the surface The Climate Corporation seems like a weather insurance company, CEO and former Googler Dave Friedberg explains (video above) that it is actually a big data play, using a complex relationship of data sources and machine learning algorithms in order to predict the weather and other agribusiness conditions.
Currently the company monetizes by optimizing custom insurance plans for farmers based on this data, and, unlike traditional weather insurance companies, uses its data measurement system to pay out farmers if bad/out of the ordinary weather happens.
The Climate Corporation’s “Total Weather” insurance plans cost $30 an acre, and pay out around 10x if a covered weather event like rain or drought happens. The insurance costs are around 3% of an average farmer’s revenue according to Friedberg, who views the potential size of the market at $3 trillion globally.
Friedberg tells me he will use this fresh funding to expand The Climate Corporation internationally, and underscores why this is important by referencing an incident where 2000 Indian farmers committed suicide when expected monsoons did not arrive on time. With these expansion efforts, the company will be hiring another 50 people, a combination of engineers, researchers and data scientists.
“We like to tackle and solve some of the world’s most challenging problems,” Friedberg says, on what’s next for The Climate Corporation beyond insuring farmers, “A farmer is about as analog as it gets. To be able tell a farmer this is what’s going to happen at the end of a season, that’s mind-blowing.”