Here’s the Google Ventures investment in weather forecasting (well, weather insurance) which I predicted back in November. On Monday afternoon, weather insurance startup WeatherBill announced it has raised a second funding round of $42 million from Google Ventures and Khosla Ventures, and including existing investors NEA, Index Ventures, Allen & Company, Atomico, First Round Capital and Code Advisors.
Climate change means the world will be facing more unpredictable weather — anecdotally, there has seemed to be an increase in extreme weather events over the past couple of years, from heat waves in Russia to extreme snow on the U.S. east coast, to floods in Pakistan and Australia. And if you’re in a weather-sensitive business like farming or owning a ski resort, unexpected and unusual weather can mean a significant loss of sales.
San Francisco-based WeatherBill offers businesses financial protection against unexpected weather. In the release Monday afternoon, Khosla Ventures partner Vinod Khosla said “Now WeatherBill can help farmers globally deal with the increasingly extreme weather brought on by climate change.”
The traditional insurance industry is still figuring out how to address this world of increasingly unpredictable weather, and WeatherBill’s technology is bringing that business to smaller businesses and also via the web with its “Total Weather Insurance” product. In an interview I did with WeatherBill CEO and Co-founder David Friedberg back in 2007, he said businesses just need to qualify with a $1 million net worth for the insurance (I’ll update this if there’s a new cut off).
WeatherBill had already raised a $12.5 million Series A round back in 2007, and Monday afternoon, the company said its new round of funding will be focused on helping the company expand in the U.S. and globally.
Weather insurance is essentially about adapting to climate change, and until more recently, adaptation was kind of a dirty word because it was positioned in contrast to preventing climate change. But as it’s become increasingly clear that climate change is coming, and already here on a slight scale, more and more investors will likely look to back adaptation technologies. As I put it in this article in December: Adaption is the hot new sector in greentech.
Google has been interested in investing in ways to use its software and algorithms for organizing weather data. As Google Ventures’ Kenneth Davies told me last year, it would make sense for Google to work with a third party that has already been working on new weather forecasting tools and hardware, and help such a company by providing either software and data integration services or some strategic capital. On a side note, both WeatherBill co-founders are ex-Googlers.
Weather data and weather forecasting tools — trying to find accurate weather and temperature information in advance and in real time — is already being used by many utilities to manage their power grids. Fluctuations in temperature and humidity can determine how much electricity will be used by buildings for heating and cooling, and can help utilities avoid blackouts in extreme (hot and cold) weather.
To date, the government has been the leading repository for weather data with its National Weather Service, which was developed by the U.S. government’s National Oceanic and Atmospheric Administration, and provides “weather, hydrologic, and climate forecasts and warnings,” for “the protection of life and property and the enhancement of the national economy.” WeatherBill takes this government data and incorporates it into applications.
Other companies like IBM are selling weather forecasting services to utilities; smart grid firms like Silver Spring Networks incorporate weather data into utility dashboards; and startups like EcoFactor fold weather data into their automated demand response services. Weather data is becoming an interesting platform that companies like WeatherBill are building value upon (see my article on How Weather Data Could Be the Next Location Data).
For more research, check out GigaOM Pro (subscription required):
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