Anthemis and IA Capital Group Participate in Round; Nephila Capital and Munich Re to Provide Risk Capacity
The Demex Group, a technology company that has pioneered a new paradigm to customize and deliver climate-resilience through financial risk solutions on a global scale, announced it has raised $4.2 million in Seed funding from leading financial services investors Anthemis and IA Capital Group.
Operating at the intersection of banking and insurance, The Demex Group brings together decades of experience across technology, finance, risk management, capital markets, commodities, insurance, and climate science to develop cutting-edge technology and customized financial solutions that mitigate unique weather risks and seize climate-linked business opportunities.
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The funds will be used to build out the Demex team and to support go-to-market for municipalities and enterprise customers, which include Fortune 500 property managers with highly volatile year-to-year snow-removal expenses.
The Global Risks 2020 report produced by the World Economic Forum analyzes dozens of significant risks, including weapons of mass destruction, geopolitical instability, economic crashes, and others. For the first time, “extreme weather events,” “natural disasters,” and “failure of climate change mitigation and adaptation” are in the top five global risks for both impact and likelihood of occurrence within the next ten years.
Extreme weather leads to dramatic fluctuations in revenue, commodity prices, and other operating costs. Yet existing risk management approaches were designed for a different era. They are ill-equipped today to provide reliable climate-linked financial security. The Demex platform for climate resiliency is a robust end-to-end ecosystem which shields customers from the financial surprises of volatile weather empowering them to grow their businesses.
Anthemis’ Ruth Foxe Blader said “Corporates, large and small, need balance sheet protection against non-catastrophic climate risks. Demex is, by far, the most sophisticated solution to this problem existing in the market, in terms of calibrating and transferring climate risk. They will transform how the insurance industry thinks about weather resilience.”
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Matt Perlman, Partner at IA Capital Group said “Managing operational climate risk is quickly becoming an imperative for businesses across a growing array of industries. The Demex Group’s ability to analyze a client’s specific exposures in a very granular way and generate a precisely calibrated risk transfer solution goes far beyond traditional weather derivatives and represents the frontier of parametric insurance.”
Munich Re Trading LLC (MRTL) provides weather risk transfer solutions for industry sectors impacted by increased weather variability. Previously, MRTL and Demex developed select customized weather index-linked hedging instruments to help businesses manage non-catastrophic weather risks. MRTL continues to provide risk capital and back office support to Demex as it innovates in the climate and weather risk management industry. “Innovation and technology can help businesses become more resilient and better manage the impacts of extreme weather,” said David Stevenson, CEO and President, MRTL. “We are excited to witness the next chapter as our colleagues grow and expand their business to help customers mitigate the risks associated with unpredictable snowfall.”
Nephila Climate, the weather and climate risk-focused business unit of Nephila Capital Ltd, has partnered with Demex to offer weather risk capacity that backs the financial products that Demex creates for its clients. “The technology that Demex has developed, combined with its knowledge of weather and financial risk, can help institutions better understand and manage the risks they hold,” said Matt Coleman, Director of Strategic Partnerships at Nephila Climate.
Demex Founder and CEO, Ed Byrns said, “Our customers know that extreme weather drives unwanted fluctuations on their bottom line. We are building a world where financial resiliency to climate is as simple as the tap of a credit card.”
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