America’s Flood Risk Draws a Global Crowd of Climate Startups

One of the hottest niches in adaptation tech deals with the wettest of conditions.

In recent years, a throng of flood risk intelligence companies have grown up amidst a sequence of costly deluges that have claimed thousands of lives and inflicted billions in property damage. While these start-ups hail from all over, there’s one market drawing their attention above all others — the US.

Norway’s 7Analytics announced plans to bring its high-resolution flood prediction tech to the US last year. The UK’s Previsico recently secured funding to expand its US footprint. Fathom — another UK company acquired by reinsurance giant Swiss Re — is taking steps to woo US financial institutions with its flood modeling capabilities. The list goes on.

Why are all these companies heading west? “I think that the US is attractive for lots of different types of technology because of the depth of the problems. It’s so globally covered media-wise that there’s a lot of data and there’s a lot of attention around issues of flooding,” says Christine Boyle, a partner at Burnt Island Ventures, an investor in water tech companies including Previsico and US-headquartered Floodbase. “The US is getting a lot of coverage, and people kind of hear about it, see it, start to sort of salivate around the opportunity to be had,” she adds.

Boyle isn’t wrong about the depth of the problem. A 2024 Democratic-led analysis estimates that flooding costs the US somewhere between US$180-496bn each year. The most recent mega flood — the Texas deluge from earlier this month — could cost US$18-22bn alone, according to AccuWeather. That’s a lot of dollars that could be saved via better flood risk management, which translates to a lot of opportunities for flood tech providers.

“It’s our most significant market from the perspective of deal size and customer size,” says Karena Vaughan, Chief Sales Officer at UK-based Fathom. “In terms of company growth, it’s an essential step [expanding in the US] — and it’s really driven by the demand in the market for future-ready, high resolution risk data,” she says.

Early-stage investors in flood tech companies understandably want to see their portfolio companies achieve revenue growth once their products are ready for prime time, which makes encouraging them to enter the most lucrative market — the US — a no-brainer, too.

The evolving nature of climate hazards in the US is another aspect of the problem drawing overseas providers stateside. Hurricane Helene in particular was a turning point, says Boyle, as it underscored how riverine flooding risks can have major impacts, even in parts of the country once dubbed ’climate havens'.

Then there’s the sheer variety of actors affected by, and wanting to prepare for, flood disasters. Demand is coming from emergency managers, often the first into the fray when a deluge strikes, who need real-time flood mapping data — fast — to save lives and prioritize recovery efforts. Then there are insurers, which require up-to-the-minute flood information so they can check if any parametric policies they issued are likely to trigger, and to estimate overall claims volumes. In flood-prone areas, insurers also want to know whether they should underwrite homes and property at all — and if so, understand what resilience measures policyholders could take to mitigate their risks.

Banks and asset managers are also clamoring for improved flood risk data to measure the vulnerability of their portfolios. The same is true of public works agencies, which want to identify safe locations for siting new infrastructure. Even car dealerships want flood analytics, so they can set defenses that prevent their inventory from floating away. 

Amidst all this demand, overseas providers are picking their spots with care. Vaughan says that Fathom is focused on the “high growth” sectors of insurance, banking, and real estate. The company is selling direct to the heavyweight institutions, with Swiss Re acting as a “vital distribution partner.” While Fathom has plans to establish a US office in the future, Vaughan says being remote hasn’t stopped it from picking up large US-headquartered clients already. 

Others are selling mainly through insurance partners, or by responding to RFQs from US local governments. The latter is an approach that’s worked for FloodMapp, an Australian company that has a six-person outpost in Denver (FloodMapp USA Inc). The firm specializes in live flood mapping before, during, and after an event. “Why we've gone after some of the government RFIs, RFPs, RFQs was that we saw this gap that emergency management agencies were facing,” says Juliette Murphy, FloodMapp’s CEO and Co-Founder. “They had completed maybe a flood study, they had access to FEMA [Federal Emergency Management Agency] flood insurance rate maps. They knew the special flood hazard areas … but the question they wanted to answer is: where are the flood waters today? Where is it flooding right now, and where’s it going to flood in 24 hours from now?” 

Murphy says the company differentiates itself by offering rapid onboarding and ensuring its data can mesh with client’s existing systems with ease. “The hurricane season last year, we had agencies or entities reach out to us and within an hour of getting a purchase order, they can be onboarded [and] using the product actively within their system,” she explains.

Unlike Fathom, Murphy says FloodMapp has found that being physically present in the US has been important for winning deals. “You want to know that a company has an understanding of your geography and the support there. So when we made the decision to go into the US, we really prioritized spending time physically in that market, building a team physically in that market, and setting up corporate operations in that market. That's been really key to our success in the US market,” she says.

The size and scale of the US acts as one magnet for international flood tech start-ups. The country’s patchy data landscape is another. Organizations have long groused that FEMA flood maps, used by federal authorities and many other public agencies, are hopelessly outdated and frequently underestimate flood risks — as evidenced by the recent Texas deluge.

“This is not a new problem,” says Beth Tellman, Co-Founder and Chief Science Officer at Floodbase, which specializes in flood data and monitoring for the parametric insurance space. “The inaccuracies in FEMA flood maps have been well known for a long time, and so there have been companies sort of filling that space.”

However, it is a problem that could be exacerbated by the Trump administration’s cuts to federal agencies, like NASA and the National Oceanic and Atmospheric Administration (NOAA). The White House has proposed gutting funding and shuttering climate data operations at both institutions — and has already slashed headcounts dramatically. This could increase demand for the kinds of high-resolution flood data that private companies are touting.

Tellman, however, is unsure about the knock-on effects of these policy decisions. For one thing, some of the White House’s threats to end data collection and decommission satellites haven’t come to pass. Barely a month ago, NOAA announced that it and the National Weather Service would no longer receive hurricane-forecasting data from the Pentagon’s Special Sensor Microwave Imager Sounder (SSMIS). Yet earlier this week, the Defense Department reversed course, saying it would keep sharing data until the sensor fails or the program formally ends in September 2026.  “It does seem like there’s been a pretty large amount of pushback on taking down public data sources — and we haven't seen it yet,” says Tellman.

For some flood tech players, though, the rollback of federal funding for adaptation at the local level offers them an opportunity to scale. Changes to FEMA’s Building Resilient Infrastructure and Communities program and Hazard Mitigation Grant Programs have already stopped thousands of states and cities from accessing billions of dollars for resilience projects. Tax cuts at the federal level could also slow the flow of funds to emergency management departments nationwide.

Murphy says FloodMapp could capitalize on these shifts. “It’s a changing landscape. We’re following the news day to day. But what we’re seeing is a big opportunity for companies like FloodMapp, who do specialize in that flood forecasting, to play a critical role in filling some of these gaps that we’re seeing emerge in [terms of] what agencies are able to provide within the funding constraints that they currently have,” she says.

Still, she warns that US policy changes present both headwinds and tailwinds to the company. “We work in an area that’s high risk, but I'm an eternal optimist. I want to believe that there’s going to be opportunities,” she says.

Not everyone shares her rosy view, at least on the investor side. John Robinson, partner at Mazarine Climate — a venture fund focused on the water vertical in adaptation technology — is skeptical of the opportunities for flood tech to scale in the tricky B2G space.  “If there is one insight I might offer investors, it would be to put a lower priority on early-stage companies trying to sell ‘flood management solutions’ to municipal governments,” he says.

Flood risks are in no way diminishing, and there’s clearly space for multiple tech providers to cater to the sprawl of actors that are hungry for solutions. Still, it’s highly unlikely that the market five years from now will look the same as it does today.

Already, there are a few big fish that may consolidate the market, or push smaller players— including those from overseas — out of the game. First Street, an all-in-one climate risk model and data provider, was cited by a number of companies as a competitor.

“First Street is a very well known brand throughout the US, and they've done excellent work in marketing. It’s not always easy for a company coming into the US market to build and establish its brand in the same way. And so investing in market education is something that certainly we’ve had to do, and I see other UK and European vendors doing,” says Vaughan at Fathom.

First Street itself seems happy to see a thousand flowers bloom. “More providers entering the space means more perspectives, more data, and ultimately more innovation,” the company said in a statement to Climate Proof.

Tellman at Foodbase also sees consolidation in the flood parametric insurance space. When it comes to these sorts of policies — which trigger when predetermined event thresholds, like the quantity and spread of floodwaters over a particular time horizon, are crossed — having a reliable “source of truth” is essential. Past experience in the wind risk space, where the market coalesced around Moody’s HWind model, suggests participants tend to lean towards a single provider, says Tellman.

But another future is possible. Flood tech solutions already come in many forms, and the ecosystem could be segmented into ever-finer slices to serve niche markets that right now may be small, but could grow rapidly as climate change intensifies. Robinson at Mazarine identifies no fewer than seven verticals in the flood tech market already, from earth observation to AI-powered analytics. One potentially overlooked segment are “citizen engagement” tools, he says, which put flood risk intelligence directly in the hands of consumers. “Citizen engagement may present some attractive business and investment opportunities that didn’t exist a few years ago,” he says.

Murphy sees a more heterogeneous future, too, in which new companies continue to be formed, but large software companies, insurers, and engineering firms increasingly partner with — or snap up — the smaller players to augment their own capabilities. There will be no let up in the migration of overseas flood intelligence start-ups to the US in this scenario.

“Given the gaps in the market, that does create more appetite [among US clients] to look to work with firms that have international expertise, and bring in that expertise into the local market,” she says.

Thanks for reading!

Louie Woodall
Editor