The incoming storms and how weathertech start-ups are preparing companies for it

Predictive weather tech is becoming ever more important at a hyperlocal level.
Predictive weather tech is becoming ever more important at a hyperlocal level.

Economic losses from weather catastrophes globally were estimated to have exceeded $230bn in 2019, and with global warming and climate change expected to continue to affect all types of weather phenomena, with increasing impact on urbanised areas, the market for accurate weather forecasting has become a critical need in many sectors, from airlines to ride-sharing services to agriculture.

One start-up making waves within the weathertech industry that I recently met is Climacell, whose co-founder, Rei Goffer, walked me through the current problems in the market and how the company is tackling them.

Climacell is a weather intelligence platform which provides AI-powered insights to predict the business impact of weather forecasts to allow companies to proactively optimise operational plans. ClimaCell believes that the entire “value chain” of weather can benefit from new approaches. Since its inception, it introduced revolutionary innovations at each link of the chain, from sensing to modeling to analytics. Few examples include its “Weather-of-Things” technology to utilise data from cellular and vehicle networks, and its Insights engine that intelligently translate weather to actions for infinite applications.

A number of prominent companies, including Uber, Jetblue, National Grid, make use of the predictive software to assess the impact on their operations and fleets and thereby improve and amend their plans as required. Use cases include predicting rider demand and ensuring sufficient drivers are available when demand is expected to spike or helping manage downstream demand for electricity based on weather patterns. The use of ground-based technology has allowed the company to collect hyperlocal, actionable data.

Goffer highlighted the importance of weathertech, “Weather technology is very horizontal — it can be applied to and is valuable to most industries and sectors.”

And despite the COVID-19 slowdown that many businesses have seen, Climacell has seen an uptick in use from those clients for whom weather-related mistakes are particularly costly, and in today’s environment, are looking to preserve cash in every way possible. On the government side, which remains a key consumer of Climacell’s services, there has been no slowdown at all.

While Climacell has successfully raised more than $70 million to date, a smaller start-up beginning to generate interest in the industry in WindBorne Systems. WindBorne, unlike Climacell, focuses on the sensor side, but the goal is also to collect hyper-local, high-resolution data to help farmers and companies gather data using weather-balloon-assisted tech. According to a recent Forbes profile on the founders (who are on the coveted Forbes’ 30 under 30 List), WindBorne builds weather balloons that are more durable and can fly longer than conventional balloons and can also be navigated while in the air, so they can collect data from specific points of interest.

A key differentiator for WindBorne, which partly remains in stealth-mode, as shown by their barebones website, is the dramatic reduction in the cost of launching a weather balloon. The company is focusing on reducing costs as well as the number of observations required to build a clear, predictive picture of the chosen area, thereby appealing to a wider range of users, such as local farmers.

Despite recent progress by Climacell, WindBorne and a number of other start-ups, weathertech remains a government stronghold in many cases.

“The market for raw weather observations is comprised of government, defence corporations, and companies such as Climacell, the same 15 or so customers,” notes Goffer, “whereas most people care about the end predictive use and related information, not the weather models themselves as everyone else is downstream and can use the packaged data we provide.”

The limited market for weather models and data means the competition is fierce in providing the most accurate and reliable data as well as building a strong reputation in predictive weather analysis to avoid the commoditisation of data.

“The same information is being provided by almost all of the main sources and, as a company, we are competing against very well-funded government organisations in many cases, and hence to compete successfully you must gain an edge. At the end of the day, there’s still a huge gap between a better weather forecast and better business results. We focus on closing that gap,” Goffer adds.

Despite the challenges, weathertech seems destined to continue commanding attention, with one report indicating that the weather forecasting systems market (estimated to be $2.3 billion in 2019) is projected to reach $3.3 billion by 2025, at a CAGR of 5.7% from 2019 to 2025.

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Asha Tanwar

Asha Tanwar

Growth investor and HBS grad, writing about all things tech, startups and post-MBA life. Follow her on Twitter or Instagram @ashatanwar_