Singapore-based Climate Alpha analyzes the impact of climate change on real estate

Founded by an expert in geography and globalization, Climate AlphaThe AI-based platform helps real estate 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 Check@Jungle program for second-time founders and operators with extensive experience.

Climate Alpha’s customers include institutional investors such as Oaktree Capital and BentallGreenOak, and American homebuilder Lennar Corporation.

The platform uses Geographic Information System (GIS) data and economic modeling to help real estate owners understand the impact of climate change on their property. It also uses public and private data streams and proprietary machine learning algorithms to generate forecasts of the financial impact of climate change.

Before founding Climate Alpha, founder Parag Khanna wrote a book called “Action: Where People Go For a Better Future“which looks at how climate change, geopolitical upheaval and technology influence where people live.

While working on the book, Khanna and his brother also began helping their parents find climate-changeable locations to retire to. Parag asked FutureMap research director Kailash Prasad to correlate the climate profiles of different locations with property value forecasts. This correlation, called “Climate Oases,” was launched as a FutureMap practice area and in turn became Climate Alpha. During the pandemic, Climate Alpha won a grant from the Singapore government to develop data science capabilities. It 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 added that Climate Alpha is in many ways an extension of the “Move” thesis, which is backed by data science, climate modeling and econometrics.

The head shot of Dr.  Parag Khanna, founder and CEO of Climate Alpha, is pictured on a white background

dr. Parag Khanna, founder and CEO of Climate Alpha

“Real estate has gone up and to the right for decades, but suddenly that is no longer the case, whether due to climate change and increased insurance, demographic outflows, high interest rates, shifting investment patterns or all of the above,” Khanna said. “We model these complex interactions in ways that provide more confidence in where—and where not—to invest.”

Using data from sources such as industry-standard climate models, census and economic data, Climate Alpha can provide detailed physical climate risk data, including projections and scoring, for any location in world. It can also include factors such as the reliability of energy grids and economic strength, both of which can offset the risk, in countries such as the United States and Canada (with more added). Climate Alpha shows a location’s expected future economic growth and asset values ​​compared to historical trends, to help investors make decisions.

For example, Oaktree Capital uses Klima Alpha’s risk and resilience rating to find hotspots in its portfolio, provide reporting to investors and identify future high-growth locations for investment. . Atlas Capital leveraged Climate Alpha’s data to build a climate-proof multi-asset ETF.

Climate Alpha will use its new funding to expand its research and sales teams and develop its investment advisory service. Khanna said that its purpose is to “become a global platform for managing asset managers to solid investments in the public and private markets.” It also expanded into the insurance industry and established 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, build a global sustainability 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 fund managers worldwide.Parag comes with the right domain expertise to solve this problem and the platform has seen some reliable early adopters in a short period of time.

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