If you live in the United States, chances are you have been talking about the weather a lot more in the past year. Everything seems more extreme, which is highly inconvenient.
Now, imagine that you are a farmer who relies on the weather NOT being extreme in order to ensure your livelihood. What happens with the weather isn't just inconvenient, it could wreak havoc on your bank accounts. How do you introduce a higher degree of financial predictability? Enter WeatherBill, a technology company founded by two ex-Google employees that offers customizable weather insurance.
What WeatherBill does is pretty impressive: its technology aggregates weather data from lots of different sources, analyzes it and then runs simulations to get a sense of potential perils that could mess with a farm's crops, such as excessive run, early frosts, early heat waves and such. Here's a description of its Total Weather Insurance offering, which is new in 2011. The company also offers traveler's insurance for your vacation via a web site called Raincheck.com.
And now, WeatherBill has $42 million in Series B venture capital to help with its expansion this year in the United States and internationally. New investors include Khosla Ventures and Google Ventures. They join NEA, Index Ventures, Allen & Co., First Round Capital, and Code Advisors as backers of the company.
Greg Smirin, CRO of WeatherBill, says 90 percent of crop losses are drive by weather. Although farmers can use federal crop insurance, WeatherBill's technology makes it simpler to purchase insurance against those losses. The company uses a combination of weather information, historical crop yield data and so forth to predict what might happen during a given growing season and protect against it. That data is used to price the insurance appropriately, Smirin says.
"The weather has become more variable," he says. "As those extremes increase, the surety that farmers have had in the past becomes less."
Here's some personal perspective from a farmer who is using WeatherBill, which has been offering its products for a couple of years now. The quote, which is in WeatherBill's press release about its new VC, is from Steve Wolters, a farmer in Celina, Ohio, who grows corn, soybean and wheat:
"Nine years ago, we have a very dry growing season in rural Ohio. A year later we experienced 14 inches of rain in 10 days. The flip flop of weather from one year to the next is the biggest challenge farmers face. 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. Protecting my seasonal profits with this product, before I even plant a seed, greatly reduces the risk I take every year and allows me to invest in improving my growing operation."
You could foresee a future in which agricultural concerns might use this data to help rotate crops appropriately, but I'm probably getting ahead of myself. For now, this is a great example of how technology might help agribusiness, without getting in the way.