Why we decided on a follow-on investment in dClimate?

dClimate is a global network transforming trillions of climate data points into actionable insights, at the intersection of Climate Tech and blockchain. Furthermore, dClimate will provide a transparent, decentralized marketplace that connects data publishers directly with data consumers, making climate data more accessible and reliable. In addition to its critical work in climate data solutions, dClimate is also spearheading carbon initiatives that aim to revolutionize carbon markets by creating more transparent, efficient, and scalable solutions. The founding team brings deep experience from the parametric insurance market, where they have founded Arbol, a company that is having a significant impact on the industry and just raised a Series B, and an appreciation of how smart contracts and hyper local accurate climate data can create value for a large number of stakeholders.

Problems being solved

• Global climate data is a massive market that is serviced by a mix of government and private sector providers with little transparency or standardization and with huge gaps in data and forecast availability.
• This dearth of data means that climate and forecast information is often inaccurate, conflicted, or left stagnant for extended periods.
• At the same time, the demand for accurate data and forecasts are growing rapidly with industries ranging from finance to logistics.
• There is no good way to shop for climate data. Data consumers cannot know how a given data source stacks up against the competition.
• There is no marketplace for data publishers to monetize their data. An expensive, opaque, direct-to-consumer model is the only option.
• The integrity of the data can be questionable. There is no immutable record and data releases are often changed after the fact.
• The demand side of the market has no way to signal what areas need further development. There is a lack of incentive for innovation.
• The carbon markets suffer from inefficiencies and a lack of standardization, complicating the assessment and use of carbon credits.
• Current MRV (Monitoring, Reporting, and Verification) processes are inconsistent, leading to challenges in ensuring transparency and accuracy in carbon initiatives.

The dClimate Solution

dClimate addresses these problems by creating core infrastructure, indexing and organizing global climate data making it easy to query a location, climate variables, and time period. dClimate has grown its climate data repository from a few TB at inception to 100TB today including hyper local climate variables with 50–100 years of history, 120K weather stations, and global carbon maps.

dClimate has used its infrastructure to settle over $1.6 billion in notional risk since 2021. It has also developed multiple applications which work together to be a comprehensive approach to climate risk analytics. Each of these are built on the core dClimate infrastructure which significantly reduces overhead in developing climate tech applications — the infrastructure is being opened up for other developers as well and the team is using their current product suite to not only scale revenue but to show what can be built easily and effectively using the dClimate infrastructure. The applications are being rolled out through the back half of 2024 and early 2025:

• dClimate Marketplace
• The dClimate marketplace provides an intuitive and simple user interface to facilitate discovery and sharing of global climate information. This work cements their status as leaders in decentralized data infrastructure working with leading technologies in the space.
• dClimate Aegis
• Aegis provides long term physical climate risk assessment integrating dClimate’s high-resolution weather data with advanced climate modeling, helping clients assess their exposure to extreme weather events across 14 climate perils under different scenarios. Aegis was launched in July 2024 Tata Consulting Services as an initial partner.
• dClimate Siren
• Siren is a precision climate monitor focusing on near term climate risk and weather alerts for different parts of the commodities supply chain and covers both agricultural commodities and renewable energy. Siren analyzes over 5 trillion data points globally, adding over 1 billion data points daily, and distills it into actionable insights. Siren enables proactive management of upstream and downstream supply chains.
• dClimate CYCLOPS
• CYCLOPS is a digital monitoring, reporting, and verification (dMRV) platform enabling scale, transparency, and accountability for carbon markets. CYCLOPS enables near real-time project assessment in some of the most remote, at-risk forests — injecting speed and precision into a process that traditionally takes many years. CYCLOPS is working with project developers and will be a core part of the tech stack for dClimate’s project development work.
• dClimate CO2.0
• CO2.0 is dClimate’s approach to providing an end-to-end solution for carbon market infrastructure, democratizing access to carbon markets through data and carbon supply. CO2.0 creates a quality tracker for carbon supply updating digital carbon assets in real-time, facilitating market transparency, liquidity and price discovery. CO2.0 allows ground data providers, competitive MRV systems, and MRV customers to monetize and share results seamlessly. CO2.0 is slated to launch in early 2025 and numerous countries have reached out to dClimate to white label CO2.0 for their national registries and carbon trading programs.
• dClimate Carbon Project Development
• dClimate is engaging with several countries as a project developer and infrastructure provider to bring carbon sequestered in their national forests to private capital markets as high-quality, validated carbon credits. dClimate signed a landmark initial agreement with the Democratic Republic of Congo to originate 100 million tonnes of carbon valued at ~$1.3bln USD in the Congo Basin — an area in need of preservation. This project makes dClimate one of the largest carbon project developers in the world and has not only garnered international attention but allows dClimate to embed its carbon technology throughout the market.

Economic Opportunity of Climate Data

Climate data drives the forecast and insurance products that can help businesses avoid or mitigate their losses.

Climate change has never been more important and there has never been more reliable climate data being produced and used. Data providers are actively seeking ways to monetize their data, but the current model is inefficient and leads to large corporations keeping their data siloed.

70% of companies around the world are impacted by weather. According to Morgan Stanley, climate disasters have cost North America $415 Billion in the last three years, much of that due to wildfires and hurricanes. $3 Billion is the estimated national cost of accident damage, injuries, delays, and unexpected operating costs. In 2019, over 400 natural catastrophe events resulted in $232 Billion in economic losses globally. Insurance programs covered only $71 Billion of these damages.

The National Weather service currently estimates the value of the private weather industry to be $7 Billion, with a projected increase to $12 Billion by 2025. The size of the weather forecasting services market is projected to grow from $1.5 Billion in 2020 to $2.3 Billion by 2025.

Parametric insurance is a significant user of climate data with about $15 Billion of catastrophe bonds issued. Traditional insurance covers loss, and as such, necessitates a “boots on the ground” approach when the time comes to evaluate how much money should be paid out to a policyholder. This can work in wealthy, dense population centers, but it is not scalable across more geographically expansive domains. Human loss adjusters introduce a large degree of uncertainty and subjectivity to the process, bringing delays, disputes, high overhead, and occasionally fraud.

Parametric financial instruments are a scalable alternative to traditional insurance policies and are a compelling solution for business entities seeking to mitigate their climate risk. Rather than creating a situation where both parties need to agree on whether subjective circumstances on the ground constitute a loss, a parametric instrument simply pays out based on objective data generated by 3rd parties. The classic example of a parametric coverage is a put or call option for a publicly traded stock that pays out if the given stock is trading at a certain price at a specific time. This works because a stock’s price is public, uncontested information. Thus, when it comes to creating parametric products for climate risk, having uncontested, highly available climate data is foundational.

The unscalability of traditional insurance has resulted in hundreds of billions of dollars of uninsured losses due to a host of causes from hurricanes to micro-droughts to wildfires. In agriculture alone, $1 trillion of crops are estimated to be uninsured each year, and this estimate does not count the millions of agribusiness entities exposed to weather.

These financial losses not only hang over farmers’ heads and act as an occasional blow to earnings, but they also actually prevent farmers from specializing into certain crop areas, driving down profits and in many cases perpetuating a cycle of subsistence.

As climate change increases general weather volatility, businesses in agriculture and beyond will need parametric financial instruments to build resilience against climate change instead of waiting for disaster aid after the fact.

Looking beyond raw climate data, there is growing demand for carbon which goes hand in hand with addressing climate risk and climate adaptation. The carbon credit marketplace is expanding rapidly and will be enormous. The total value of global carbon markets jumped 20% in 2020 to a record $277 Billion on the expected tightening of emissions caps, research by Refinitiv. Most of the increase in value came from the European Union’s Emissions Trading System (EU ETS) which accounted for nearly 90% of global value and much of the traded volume in 2020. The dClimate platform will receive a portion of marketplace sales through its work as both an infrastructure provider and project developer.

In December 2023, dClimate signed a significant initial agreement with the government of the Democratic Republic of Congo (DRC) at COP28 in Dubai to protect hundreds of thousands of hectares of at-risk tropical rainforest in the Congo Basin rainforest and peatlands. The project aims to store and sequester 100 million tonnes of CO2 over ten years, generating high-quality, validated impact carbon credits. These credits will be sold to private capital markets to fund the preservation of the DRC’s critical basins.

Apart from project development, dClimate is taking a holistic approach by working closely with the government as partners on capacity-building initiatives. This involves building the data infrastructure needed to enable the DRC’s participation in global carbon markets using CYCLOPS and creating national registry infrastructure through CO2.0.

The project stands to be one of the largest conservation projects in the carbon market. It has a long-term aim to build a framework for using technology and data infrastructure to unlock critical climate finance to preserve at-risk tropical rainforests through a pay-to-preserve model.

Founding Team & Leadership

Osho Jha: Osho Jha is a co-founder of dClimate and currently serves as its Chief Executive Officer. He is also a co-founder of Arbol, a global climate risk solutions platform. Osho comes to dClimate with over a decade of experience as a product-focused data scientist. His experience ranges from cutting edge NLP research for DARPA resulting in a speech-to-speech translation system deployed by the U.S. military to using exhaust data for trading global equities.

Most recently, he oversaw the development of an Alt Data group at a large, NYC based hedge fund. Throughout his career, his focus has been on productizing large data sets into actionable insights. Outside of data science, Osho is passionate about the blockchain space and investing. His analysis of traditional markets and crypto markets has been featured in CoinDesk and other industry focused publications for institutional investors. Osho graduated early from Carnegie Mellon University, where he studied mathematics.

Siddhartha Jha: Siddhartha Jha is a co-founder of dClimate and is the Founder, Chairman, and CEO of Arbol, a global climate risk solutions platform focused on data-driven parametric insurance. Prior to Arbol, he had over 13 years of experience in the financial industry covering the interest rates and commodities in both quantitative research and trading roles. He launched an agriculture futures trading portfolio, managing over $100 million at a major commodity trading firm, and was the first analyst at a startup commodity hedge fund, which grew to manage over $600 million in assets. He was previously a Vice President of Interest Rates Strategy at J.P. Morgan. Sid authored the well-received book “Interest Rate Markets”, published in both English and Mandarin. He has taught financial markets at NYU and was on the board of a non-profit working with inner city youth. Sid graduated from Harvard University with a B.A. Cum Laude in Applied Mathematics and M.A. in Statistics as part of a 4-year combined degree program.

Philippe Heilberg: Philippe Heilberg is a co-founder of dClimate Inc. and Arbol Inc. and currently serves as Arbol’s President. After graduating summa cum laude from the Wharton School with a BS and MBA, he went to work at top tier financial institutions like Salomon Brothers and AIG. He has been featured in a number of publications including a published article in the quarterly, “American Affairs Journal” entitled, “Cryptocurrencies: Commodity Dynamics and Cartelization.” He also has been a speaker/panelist at various conferences including the Wharton School, NYU, and Duke University. As a former commodity trader, he was a member of the New York Board of Trade Commodity Exchange. In his philanthropic endeavors, he has been a consultant to the board of directors of the GEMS Development Foundation, a South Sudan charity, a member of the New York Board of JNF and a President Circle member of the Asia Society. He continues to be active in his community.

Key dClimate Personnel

• David Phelan: dClimate’s Chief Technology Officer
• Vaughan Read: dClimate’s Head of Business Development
• Chamss Ould: dClimate’s Head of Carbon Finance
• Dr. Sue Kyoung Lee (Jessie): CYCLOPS MRV Inc.’s CEO
• Dr. Lakshya Datta: CYCLOPS MRV Inc.’s CTO
• Sami Ahmad: dClimate’s General Counsel

Advisors include: Mark Cuban, Sergey Nazarov Founder of Chainlink, notable Congolese athlete and philanthropist Didier D. J. Mbenga, and veteran Ambassador J. Peter Pham who is currently a distinguished fellow at the Atlantic Council.

Climate Impact

By improving the climate data available, both historical and forecasted, dClimate is able to drastically improve the way society can tackle climate change. This enables both improved understanding of how climate change is impacting us on a hyper localized level, and for improved products to help companies mitigate and insure these risks.

Highlights

Climate change has never been more important and there has never been more reliable climate data being produced and used. Data providers are actively seeking ways to monetize their data, but the current model is inefficient and leads to large corporations keeping their data siloed.

dClimate is creating a new business model to create, share and access accurate climate data. The team has great experience in finance and insurance sectors which are major consumers of the climate data to be made possible on the marketplace.