Climate change issues are flooding every industry – literally.
Investors have been pouring funding into climate risk companies to battle the global climate crisis that will impact food production, delivery of goods and the safety of homes. Globally, climate risk deals saw an all-time high in 2024, according to Pitchbook, and climate change-related startups raised $1.4 billion. (2024 was the second-best year after 2021, when startups raised more than $3 billion).
“To put up new geospatial sensors and imaging and things that can actually track climate trends, climate damage, but also protect America, re-support our supply chains and our independence in both energy and other factors,” said Brian Garrett, co-founder and managing director at the Santa Monica-based venture firm Crosscut Ventures. “These are all really important areas that we fund and have a ton of tailwinds behind them with additional capital.”
After nearly 20 years of being a generalist fund, Crosscut Ventures began to zero in on frontier technology investments, including clean energy, infrastructure and climate change solutions.
It’s for good reason. Climate change impacts where developers can build houses, how much food farmers grow, the monthly cost of health care for individuals, if travel destinations can provide the right weather conditions, and when retailers can expect supply chain issues on manufacturing and shipping merchandise.
The devastation of the Los Angeles wildfires is expected to cause between $250 billion and $275 billion in economic loss, per a preliminary estimate by AccuWeather, due to the property damage, impact on tourism and the negative health effects of wildfire smoke, as well as lost wages of those unable to work. That devastation, unique to the geography of California, is reflected in the funding numbers.
In 2024, 37% of climate change-related startup deals and 35% of climate change-related funding in North America happened in the Golden State.
One of those startups is Pixxel, an El Segundo-based satellite company that tracks climate issues from space. The company primarily focuses on determining crop health by analyzing the contents of the soil and potential pathogens, oil spills or environmental disruptions that could kill the plants. The company has raised roughly $95 million since its inception in 2019.
“(We wanted to) take all of the satellite imagery for the entire planet, build AI models to analyze what’s happening, and then provide those inputs to organizations to help save crops or help reduce the amount of nutrient deficiencies or look at oil and gas leak,” Awais Ahmed, one of the co-founders of Pixxel, said.
There’s also Santa Monica-based Sensible Weather. The company was founded by climate scientist Nick Cavanaugh in 2019 after he spent years growing up in the lush and varied geography of the Pacific Northwest – complete with snow-dusted hills, thick forests and steep mountains – and studying how weather changes would impact different industries.
Sensible Weather, which has raised roughly $22 million, uses climate data gathered from satellites and other entities tracking weather patterns around the globe to predict potential outcomes. Right now, the company is focused on the hospitality industry and tourism, working with campgrounds, theme parks, golf resorts and other weather-dependent travel locations to provide travelers’ insurance in case inclement weather disrupts vacations. But in the future, it could expand its reach.
“I think our platform is set up to do the same kind of risk analysis that a small farmer, a commercial farmer, a power plant, a wind farm, whoever, would need,” Cavanaugh said. “It’s just a matter of bandwidth.”
