The EG Interview: Climate X’s Lukky Ahmed

Lukky Ahmed is anxious. He has had a pretty good couple of weeks but his self-professed need for next level organisation is now paying the price. “My phone just won’t stop,” he says with a half-smile that can’t quite hide just how uncomfortable he feels about the situation. “I don’t like unread e-mails and messages. I really don’t. I’m a zero-inbox type of person. Currently I have 20 notifications and, oh my God, it’s seriously bothering me.” He pauses, takes a deep breath and resets. “It’s OK,” he says. “I’ll get to them over the weekend.” Even for an inbox minimalist like Ahmed, there can be no denying that the catalyst behind the communication influx is a good problem to have. At the end of last month, his software-as-a-service platform, Climate X, secured £4.1m in a seed-funding round led by A/O PropTech with additional investment from firms including Deloitte, CommerzVentures and Voyagers Climate Tech Fund.   As soon as the news broke that such big names were getting behind the London-based climate risk analytics start-up, managing the stream of e-mail and social media notifications became even more of a challenge for Ahmed. Suddenly, everyone wanted to know more about the company tackling an issue that A/O PropTech’s Gregory Dewerpe referred to as “an economic, statutory and moral necessity”. Here, 35-year-old Ahmed reveals what it is about Climate X that has captured the interest – and funds – of such major players, explains how his hope for more diverse deployment of capital drove him to ask for more than just cold, hard cash from his investors and talks about his journey from a banking call centre to start-up founder.  Risk assessment It isn’t hard to see why Climate X, which Ahmed co-founded in December 2021 along with Kamil Kuza, has sparked so much interest. The on-demand climate risk data SAAS platform can produce location and asset-specific risk ratings and analytics based on the impact of extreme weather events.  In a world where these kinds of meteorological threats are becoming increasingly common, information on how to mitigate against them is now an invaluable data set. As A/O PropTech’s Dewerpe said: “Climate X’s platform gives many industries the tools they need to understand, assess, predict and report the exposure of their physical assets to ecological challenges – and in doing so enable them to start planning and investing accordingly to reduce future losses and pain.” Paul Morgenthaler, managing partner at CommerzVentures, added: “Climate X is solving a multi-trillion-dollar problem. This team has produced a vital tool capable of delivering insights into climate change-related risks for global real estate. They’re enabling decision-makers to place climate mitigation and resilience at the heart of their strategy, delivering the visibility that is essential to creating a sustainable business model.” Praise indeed. Albeit praise you would expect from two businesses that have invested in the concept. To really understand the nuts and bolts of how the platform works and what it can deliver, Ahmed is on hand to explain.  “Multiple possible futures” The first thing he makes clear is that Climate X, which now employs 18 staff in its London office, is all about adapting to a world where climate change and the impacts of climate change are part of the fabric of our lives. It is not, he says, about trying to hit the brakes. There are companies out there doing that, he adds, and it is a painfully important approach to tackling climate change as an issue.  “There are companies out there working hard to stop climate change getting worse, to curb emissions so we don’t continue to tumble down this hill. The other side of things, and where we are focused, is on resilience and adaptation. We all really need to prepare for the world we live in and the world we are going to be living in going forward. Because even if the last emission leaks into the atmosphere today, the wheels are already in motion. Imagine a car is racing down the highway at 100mph. Even if you slam on the handbrake, the car won’t stop straight away. There is too much momentum, the destruction is already happening, and this is what we need to prepare for.” Climate change and the effects of climate change, Ahmed adds, are inevitable. What he and his team are trying to do with Climate X is look into “multiple possible futures” and predict how risks such as flooding, droughts, subsidence, landslides and other similar extreme weather events could manifest over time.  And herein lies the draw that has already piqued interest among those big-name investors: “We can take the data right down to an individual location and tell you how a particular building would be affected in a particular way based on the severity and likelihood of an event happening. More than that, we can quantify the financial impact on the property. A building might be worth a million dollars based on what we know about it but if you take into account, for example, the fact that in 10 years’ time it is going to flood and every year after that the flooding will get more severe, that’s a new piece of data and it fundamentally changes how we price that property. Is it still worth a million dollars if I know that new piece of information?” Ahmed says Climate X isn’t just a tool for property owners to ascertain the risks within their existing portfolios. It is a tool that can look ahead and “quantify asset vulnerability” and shake up the real estate investment market.  Deep data So how does it work? The data is available across more than a trillion data points and all Ahmed and his team need for a detailed analysis of a specific location is an address or map co-ordinates. Climate X can run that through the software and return an overall risk rating for an entire portfolio, with an option to drill down to see which properties are at particular risk and what is driving the risks in each asset. It is this information that could prove key to resilience.  “If you are a local council and you have some local authority housing in a risk area, that creates an argument to invest in, say, flood defences because our data would show the cost of inaction over the next 30 years would be significant,” says Ahmed. “This is what we are trying to achieve. It really is super simple.” Simple in terms of the ultimate information output and data required from the user, perhaps. But not quite so straightforward in terms of the technology. That is reassuringly complex.  “The way I am describing it is a gross simplification of the system that my scientists might not be too happy with,” laughs Ahmed. He appreciates people will want to know more about how the platform works, given what he says it can and will achieve. “There has to be a reason for people to believe what I’m telling them,” he says. “Some people say to me ‘Look, we can’t predict the weather two weeks in advance. How can we talk about what might happen in eight years from now?’” The answer, quite simply, is we can’t. But that isn’t what Climate X claims it will do, says Ahmed. Rather, the platform can map the world, building-by-building, block-by-block, street-by-street, taking into account every gradient, hill, valley and mountain to tell users what their risk would be if and when a certain weather event was to hit based on where their asset sits in the world.   “We are recreating the world as if it was a game like The Sims but at a hyper level of detail with satellite imagery and remote sensing data,” says Ahmed. “There are a lot of things out there in space taking measurement of various points of Earth all the time. With that data and high-resolution images, we can figure a lot out; the elevation of the terrain, how steep a hill is, whether the surface is made from concrete or soil. We map all of this, and we can effectively switch on the law of physics.” Click here to take part in EG’s ESG Data Survey What the system is looking for is what it takes to create a breaking point. By taking the map Climate X has created, multiple weather conditions can be simulated and risk probabilities determined. How much water would need to fall above London to create a significant flood event? “I can literally just start to pour water into the system and see because we are simply implementing the rules of physics,” says Ahmed. “If water pours over the surface we are quite confident we would get a very accurate picture of how that water would behave based on our map.” But, he is quick to add, don’t just take his word for it. “We don’t work in a silo. This isn’t just Climate X. We work with some of the leading climate scientists in the world and we are working with the British Geological Society to validate some of the work we have done. We are seeing phenomenal rates of accuracy; 95-98%. But we are completely open to critique and for people to come to us and challenge our numbers. We can provide running proof of values, which people want and need to have confidence in what we do. And when we are faced with data challenges and questions, we have been coming out on top.” Focus on values The next steps will be to deploy the funds raised in the seed round, focusing on product launches and expansion into Europe and the US.  Ahmed explains that he didn’t accept the funds blindly and indiscriminately. Who Climate X chose to have in its corner goes beyond the cash. “There are big diversity problems in the VC world and among start-ups,” says Ahmed. “I wanted to make sure our investors’ values were aligned with ours.”  By this he means ensuring their dedication to investing in female and minority founders was at the top of their list of priorities. “They have all agreed to come to me with updates on how they are addressing diversity and inclusion within their own funds,” he adds. “I want to enable the opportunity for investment for as many people as possible with great ideas, and diversity is a major barrier when it comes to raising funds.” Holding investors to account is a bold move, particularly given how long it took Ahmed to raise a fund himself. “I can’t tell you how many hours I put in to get myself through the door and in front of the right people against all the odds because we tick all of the minority boxes you can imagine,” he says. “It’s not easy. But it is teachable. So I am putting it out there, via my LinkedIn, to anyone from diverse backgrounds in particular and to anyone who needs help, if you need to understand how to resonate and connect with VCs and investors, then I am happy to offer the time to help and advice. That’s something I want to give back.” Spotting a trend So that’s the story of the platform and Ahmed’s bold expectations in terms of his investors. But what about his own background and path to Climate X? He is an unconventional founder by his own admission. Born and raised in Birmingham, he didn’t go to university but rather “floated around various retail jobs” before ending up in a banking call centre chasing customers who hadn’t paid their bills. “It was actually a really important part of my career as it taught me about empathy and the difficulties people can go through in life. How can you offer support and help them to change their circumstances for the better?” An acquisition and a job switch later, Ahmed was working for HSBC in a number of different roles before ending up in Hong Kong in 2015 as an international manager. “This is where I really started to think about the vulnerability of the economic system and just how susceptible it is to shocks driven by policy changes. What if China had a trade war with the US, for example? That led me to start thinking about climate change because I could see how these extreme weather events are causing disruption to business and economies. I noticed how they are always seen as isolated incidents rather than a trend.” Ahmed moved back to the UK in 2017 and Climate X launched at the end of last year. “My co-founder and I went down a rabbit hole of understanding more and more about climate change as it became more prevalent in the press,” he says. “We realised that if we took all of the data and the science that existed, we could create something crucial for financial services. We quickly realised that this is much, much bigger than that and goes way beyond financial services in isolation.” And the ultimate goal? Unlike an explanation of the inner workings of the software platform, that’s an easy one to answer. “We hope that what we are doing will enable a more resilient future.” That and restoring the Zen-like calm of a zero notifications inbox.  To send feedback, e-mail emily.wright@eg.co.uk or tweet @EmilyW_9 or @EGPropertyNews Image © Climate X