Forbes Indonesia - July 2019

60 | FORBES INDONESIA JULY 2019

COMPANIES & PEOPLE

FORBES INDONESIA

ACCUWEATHER

CLIMACELL

Founded: 2015 by CEO Shimon Elkabetz

Hyperlocal forecasts using data from cellphone

towers and street cameras

Number of employees: 100

Money raised: $77 million

“WHAT WE’RE DOING IS REVOLUTIONARY.

WE’RE CHANGING THE PARADIGM.”

the less obvious—say, Clemson University’s campus po-

lice department and Starbucks.

In all, the business could be worth as much as $900

million, and Joel owns more than half of it, with the rest

split among company executives and employees, includ-

ing his youngest brother, Evan, who serves as COO. Joel’s

other brother, Barry, who was AccuWeather’s CEO until

January, recently sold his small stake for $16 million after

being nominated in 2017 by President Trump to head the

$5.4 billion (2019 budget) National Oceanic & Atmospher-

ic Administration (NOAA).

For decades, private weather forecasting has been a

cozy industry, dominated in the U.S. by AccuWeather,

the Weather Company (founded as the Weather Chan-

nel in 1982 and bought by IBM for $2.3 billion in 2016)

and DTN, which focuses on industrial concerns and was

purchased by a Swiss holding company for $900 million

last year.

But now a perfect storm of macro-trends—ever cheap-

er processing power, cloud computing, vastly improved

AI and a proliferation of low-cost sensors—has opened up

the field to a fresh crop of ambitious startups. In aggre-

gate, they have raised hundreds of millions of dollars from

investors, who think the incumbents look vulnerable to

creative new business models.

They are fighting over a big and growing pie. Recent

numbers are hard to come by, but a 2013 study from the

Wharton School estimated that overall revenues for cli-

mate and weather companies were about $3 billion and

that, in aggregate, the industry was worth some $6 billion.

A 2017 report from the National Weather Service included

a prediction that the sector could quintuple in size.

“Every time we turn around, a different market cracks

open,” says Glen Denny, head of enterprise solutions at

Baron Services. The 29-year-old firm in Huntsville, Ala-

bama, which manufactures $1 million Doppler radar units,

has been beefing up its custom forecasting business.

The possible applications are nearly endless. Take Nas-

car races, which are halted in the event of rain. At a recent

event at Michigan International Speedway, Chevy driver

Austin Dillon skipped a pit stop and placed first when a

downpour cut the race short. His secret weapon? A pri-

vate IBM forecast that alerted him to the likelihood of pre-

cipitation. “We get turn-by-turn forecasts within a quar-

ter of a mile on the track,” says Pat Suhy, manager of the

Chevrolet Nascar Competition Group, which pays more

than $100,000 a year for its forecast subscription.

The impact grows with the size of the concern. At Xcel

Energy, a Minneapolis utility with $11.5 billion in annual

sales and a big wind-power division, saved its customers

more than $60 million in fuel costs over seven years us-

ing private forecasts from Boulder, Colorado-based Global

Weather Corp.

Each private forecaster starts with freely available in-

formation from the National Weather Service, then most

add their own data sources, collected using cheap sensors

deployed on everything from seafaring drones to, in Xcel’s

case, its wind turbines. That data is then fed into custom

algorithms and weather models, often underpinned by

rapid advances in AI and machine-learning.

“It’s not only easier to collect massive amounts of data

more and more quickly and run models on that data, it’s

easy to disseminate the results quickly,” says Eric Floehr,

the 49-year-old founder and CEO of ForecastWatch in

Dublin, Ohio, regarded as the J.D. Power of weather pre-

diction. “There is just more experimentation.”

AMONG the many weather-related startups, three stand

out because of the money they’ve raised; the innovative

ways they are gathering, evaluating and selling weather

data; and the scope of their ambitions.

The most audacious may be Saildrone, founded by

Richard Jenkins, 42, in Alameda, California, in 2012. A

mechanical engineer and sailor, he was born in the U.K.

to Australian parents and moved back and forth between

an English country home near the yachting destination of

Southampton and his grandfather’s Australian farm.