The startup Arbol just raised $60 million in Series B funding. Giant Ventures and Opera Tech Ventures co-led the round, with Mubadala Capital also participating in the fundraise. These VCs join existing investors Finch Finance and Space Capital.
Founded in 2018, Arbol, headquartered in New York, offers insurance payouts based on various climate risks, such as temperature changes and rainfall. The startup has created objective climate data markers that automatically trigger payouts — for example, a farmer facing high rainfall could receive rapid financial support while weather conditions affect their crops.
This system, also known as parametric insurance, is meant to cut out claims adjusters — insurance employees who conduct manual, and often lengthy, damage assessments — and instead quickly pay out pre-specified amounts for pre-specified climate events.
In an era marked by increased climate risk — there were 398 global natural disaster events in the last 12 months that cost $380 billion in economic loss, according to management consulting firm Aon — it's important to address these issues directly and quickly, according to Sid Jha, Arbol's founder, and CEO. AI has been crucial in that regard, he said.
"Essentially, AI enables us to deliver more responsive and tailored insurance, directly addressing our clients' needs with greater accuracy," he told Business Insider. "This precision significantly improves our underwriting efficiency, allowing us to customize insurance products that are aligned with specific climate risks and structured to activate swiftly when those risks materialize."
Despite a broader slowdown in VC funding, the energy sector emerged as a big player in 2023, and startups addressing climate change, climate risk, and the environment have raised millions from investors. Among them are Redwood Materials, a battery recycling company that raised $1 billion, and Generate, an energy infrastructure developer and investor that's raised $880 million.
Moving forward, Jha said that Arbol will work to expand its geographic footprint and cater to potential clients in the agriculture and renewable energy industries. The startup is also planning to shore up its products for individuals.
"We plan to deepen our market penetration and improve our offerings in property and casualty (P&C) and home insurance lines in the US and internationally," he said.
Check out the 13-slide pitch deck Arbol used to raise its Series B funding round.
