Exclusive: Climate risk data provider First Street raises $21 million
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First Street, which informs companies and individuals of their climate change risk exposure to flooding, wildfires and other hazards, raised $21 million in a Series A-1 funding round, the company first told Axios.
Why it matters: First Street taps into the growing demands for climate risk information among financial institutions and real estate companies as well as homeowners.
- Formerly exclusively a nonprofit, the research organization spun off a public benefit corporation in February. It has since taken in $46 million in total funding in the Series A from partners including Galvanize Climate Solutions and Congruent Ventures.
Zoom in: The latest investment is led by Innovation Endeavors and is aimed at building up First Street's software solutions for companies to better understand how their assets will fare in a warming world.
- Other investors in the latest tranche of funding are SE Ventures, backed by Schneider Electric and Nuveen Real Estate.
During the past eight years, First Street has revealed hidden flood risks for communities in the U.S., forming partnerships with real estate websites along the way.
- It played a pioneering role in bringing free climate risk info to the masses for making housing decisions.
- The company's "Risk Factor" tool has proven to be popular as prospective homeowners seek to avoid purchasing homes with a high chance of flooding, for example.
First Street counts among its clients the federal government, asset managers, large banks and others, founder and CEO Matthew Eby told Axios.
The intrigue: Eby said the company is launching a "correlated risk model," consisting of software that will be able to calculate the chances of impacts to property portfolios from multiple hazards at once.
- Users can experiment with different risk-reduction strategies, from physically modifying structures to buying new insurance policies.
- Eby likened the new simulations to a catastrophe model that the insurance industry uses, but with the ability to simulate multiple perils together, under more than one climate scenario to obtain quick results.
- Companies will access the results of these simulations using new First Street software.
Yes, but: First Street has been at the cutting edge of climate risk communications to the public, and the money signals interest in taking its approach and applying it for high-paying clients.
- However, this is also a more crowded space, with companies like Moody's, Jupiter Intelligence, S&P, CoreLogic and others comprising the competitive set when it comes to physical climate risks.
- Eby said First Street continues to bring on new customers despite the competition.
What they're saying: "The raise signals extreme belief that this market is going to grow substantially," Eby said.
- "We've proven that there's lots of interest from the top financial institutions, the federal government, everyone needs to manage this risk. How do we get this data in the hands of many people in a way that they can understand it? And that's what we're really good at. And so that's the underlying thesis that's driving it."
