Google backs weather insurance startup
San Francisco (AFP) Feb 28, 2011
Google on Monday was among investors pumping $42 million into a climate change inspired technology startup that calculates the chances of crops being ruined by weather.
WeatherBill launched Total Weather Insurance in 2010 as a way for US farmers to protect themselves against being devastated by weather, which the US Department of Agriculture blamed for 90 percent of crop losses last year.
"The flip flop of weather from one year to the next is the biggest challenge farmers face," said Steve Wolters, a farmer who grows corn, soybean and wheat in the US state of Ohio.
"It makes sense to me to take advantage of WeatherBill's automated weather insurance programs that pinpoint the weather conditions expected to affect my land and pay me if they happen."
WeatherBill continuously aggregates weather data and runs large-scale weather simulations on its computers.
The automated system lets farmers or others customize insurance policies to the amount of rain or seasonal temperatures they need for fields to flourish. Policies are paid out if the weather doesn't measure up to specified standards.
Those taking part in the startup's second round of funding with Google Ventures included Khosla Ventures, First Round Capital, Index Ventures, and Allen & Company. Total investment in the company was just shy of $60 million.
"WeatherBill is one of those rare companies that has the leadership and vision to apply new technology to an ancient and daunting problem -- weather's impact on agriculture," said Vinod Khosla, founder of Khosla Ventures.
"Now WeatherBill can help farmers globally deal with the increasingly extreme weather brought on by climate change."
WeatherBill plans to use the money to hire engineers in its San Francisco headquarters and to expand its offerings globally. WeatherBill has about 30 employees.
"It is a technology company doing some work in insurance," Bill Maris of Google Ventures said of WeatherBill.
"This is going to have a real world impact on agriculture," he continued. "Helping farmers protect their financial futures and protecting the global food supply is something we can all be excited with."
Maris noted that Google Ventures, the Internet giant's investment arm, found WeatherBill a natural fit because its founders David Friedberg and Siraj Khaliq are "ex-Googlers."
"This sort of has the feeling of getting the band back together," Maris said of investing in a startup created by former Google employees. "There is an element of people knowing and trusting each other well."
Global agriculture production is valued at more than $3 trillion annually, according to Friedberg.
"It is at risk today from extreme weather conditions, as evidenced by the recent droughts in Russia and China and extensive flooding in Australia, which have decimated global commodity supplies," Friedberg said.
He touted WeatherBill as the first company "to provide every farmer -- from the developing world to the technologically sophisticated -- with a simple and effective solution for removing weather-related risk."
In the United States, WeatherBill supplements subsidized insurance made available to farmers by the government.
WeatherBill also sells vacation insurance that travelers can buy to hedge against foul weather spoiling trips.
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