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, today 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.
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.”
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.”
About The Demex Group
The Demex Group is a team of seasoned risk advisors who leverage advanced technology and rich data to manage climate-driven financial volatility. With increasingly variable weather conditions, Demex offers businesses the ability to manage risk and create opportunity.
The Demex Solutions Center is the firm’s core technology. It powers complex data analysis required to:
- Rapidly deliver customized transactional platforms for clients and risk providers.
- Creatively analyze client exposures and establish bespoke risk solutions.
- Efficiently transfer risk to pre-certified risk carriers.
- Proactively deepen business insight through solutions monitoring and learning loops.
Demex shields customers from the financial surprises of volatile weather so that they can grow their businesses. Learn more at www.TheDemexGroup.com
Anthemis cultivates change in financial services by investing in, growing and sustaining businesses committed to improving the world. We are founded on three guiding principles — authentic collaboration, virtuous cycle outcomes, and diversity and inclusivity — and our deep understanding of markets and models, passion for emerging technology and values inspire everything we do. By creating fertile ground for a diverse group of startups, investors, entrepreneurs, institutions, academics and visionaries to converge, we believe we can solve the financial services world’s most pressing challenges faster, better and for the benefit of all. Learn more at www.anthemis.com
About IA Captial
IA Capital is the longest-tenured independent venture capital firm focusing on insurtech. Based in New York City, IA Capital has a two-decade track record of successfully partnering with innovative early and growth stage companies in insurance and financial services more broadly. IA is currently investing its sixth, seventh and eight venture capital funds and manages strategic venture capital programs for 15 insurers. Learn more at https://www.iacapgroup.com
About Munich Re
Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The Group consists of the reinsurance and ERGO business segments, as well as the asset manager MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. It offers customers financial protection when faced with exceptional levels of damage – from the 1906 San Francisco earthquake to the 2019 Pacific typhoon season. Munich Re possesses outstanding innovative strength, which enables it to also provide coverage for extraordinary risks such as rocket launches, renewable energies, cyber attacks or pandemics. The Group is playing a key role in driving forward the digital transformation of the insurance industry, and in doing so has further expanded its ability to assess risks and the range of services that it offers. Its tailor-made solutions and close proximity to its customers make Munich Re one of the world’s most sought-after risk partners for businesses, institutions, and private individuals. Learn more at www.munichre.com
About Nephila Capital
Nephila Capital Ltd is a leading investment manager specializing in (re)insurance and weather risk. Nephila Climate is a dedicated weather and climate risk transfer and ESG-driven business. Nephila offers a broad range of investment products focusing on instruments such as insurance-linked securities, catastrophe bonds, insurance swaps, and private transactions. Nephila has approximately $9.5 billion in assets under management as of July 1, 2020 and is headquartered in Bermuda, with offices in San Francisco, CA, Nashville, TN and London, UK. There are currently 139 employees across its various business lines with expertise in finance, earth sciences, catastrophe modeling, risk management and traditional underwriting. Learn more at www.nephila.com and www.nephilaclimate.com