Weather data company PlanetiQ raised $18.7 million this month to shoot more satellites into space, as climate change stokes demand for more accurate predictions and investors crowd into the space.
The deal, led by New Science Ventures and AV8, brings PlanetiQ’s total funding to $23.9 million. The company plans to send a 20-satellite network aloft next year. The 7-year-old company has participated in 13 space missions so far, where it utilizes a technology called RO it claims boosts the accuracy of a forecast.
Signs are pointing to worsening weather. Six storms and floods have hit the U.S. so far this year, where each caused at least $1 billion in losses, at a cost 15 lives, the National Oceanic and Atmospheric Administration reports. Last year was the fourth-worst regarding the number of disasters costing $1 billion or more. A 2011 study estimated that $485 billion of U.S. GDP, or about 3.4%, fluctuates because of weather variability.
“The investors see huge upside” for accurate forecasts, said Chris McCormick, founder of PlanetiQ, in an interview with Karma. “They want to make sure to execute and bring in the highest-quality data available.” expects to be profitable within a month of launching, PlanetiQ CEO Steven Joanis told Karma in an email.
The private weather-forecast market was valued at $6 billion dollars and growing at 10%-15% annually, in a 2017 National Weather Service study. Market leaders include The Weather Company, which was valued at $2 billion when bought by IBM in 2016, and AccuWeather.
NOAA is seeking a cooperative relationship with the private sector, launching an $8 million commercial satellite pilot in September. PlanetiQ, along with rivals GeoOptics and Spire, secured NOAA contracts to provide proprietary weather data.
Models predicting weather are requiring new amounts of data. Climate change is disrupting weather patterns and making historical results less useful, WorldCover CEO Chris Sheehan told Karma in an interview. WorldCover provides insurance to farmers in developing countries based on weather forecasts.
“The only alternative you really have instead of going to historical data is to go to more recent data,” said Sheehan. “Climate change makes the collection of this data that much more valuable.”
Investments in the satellite constellation sector rose by 27% to $845 million across 51 companies in 2018, according to a report from Seraphim Venture, a London-based venture fund focusing on satellite data.
PlanetiQ satellites use GPS radio occultation technology to monitor temperature, pressure and humidity, a technique the company claims is more accurate and less susceptible to outside signal interference.
In the past, satellites using classic infrared cameras and passive microwave cameras, which can’t see through clouds, only got blurry images of the earth, said PlanetiQ’s McCormick. He said his company’s sensors make it possible to have data points measuring pressure, temperature and water vapor every hundred meters, compared to lumping together data from two to four kilometers under the old methods.
While acknowledging the value of the PlanetiQ’s data, Sheehan said companies like WorldCover, which have a social mission, might not be able to afford their product. He hopes that PlanetiQ would land governments and meteorological agencies as customers, which may cut prices and make more data available.
PlanetiQ’s Joanis told Karma that governments would be the company’s main customers from January to July 2020. After that, customers will shift to industries including aviation, shipping, offshore oil and gas, defense, intelligence, energy, agriculture, insurance, retail, and transportation.
“We have to do a lot of market education for customers on why they should buy our data versus just using free data from NOAA,”said McCormick, saying PlanetiQ’s data is akin to HBO government data is like NBC.
Companies advancing weather forecast models gained momentum when IBM announced its global forecast program after the purchase of The Weather Company, which will provide precise storm forecasts in Africa and South America. Boston-based startup Climacell raised $15 million in 2017 to provide weather sensitive industries with city-block-level, six-hour forecasts.
“This is a trickle-down effect right off of this technology that helps the 2 billion people in these areas who didn’t have access to these kind of forecasts before,” said Sheehan, noting that most of the world relies on weather data shared by U.S. and European government satellites.
U.S. companies, the leaders of the commercial weather industry, are expanding their global reach. China’s commercial weather market started open to foreign companies when the country’s Meteorological Administration passed a bill in 2015 encouraging the private sector to participate by making government weather data available. Main players includes AccuWeather-backed WeatherCN and WeatherHero, which raised $6 million in 2018. China’s private-weather industry is estimated to reach $43 million in 2025.