San Francisco-based weather insurance site WeatherBill has taken $12.5 million in a round led by New Enterprise Associates and Index Ventures. Original investors Allen & Company, Atomico Investments (Skype founder Niklas Zennstrom), del.icio.us founder Joshua Schachter and Howard Morgan also participated.
Barney Schauble, a partner at Nephila Capital and WeatherBill’s risk capacity partner, will join WeatherBill’s Board of Directors. Total funding for Weatherbill to date is now $16.5 million.
WeatherBill was founded by former Googler David Friedberg. The company offers weather insurance policies to businesses – such as ski resorts, farms, airlines, construction companies, and amusement parks – with more than $1 million in net worth that have suffered losses due to unfavorable weather in the past.
Users choose a weather station via a Google Maps mashup and choose whether you want it to pay out for each hot, cold, rainy or dry day. Temperatures are set by the user by degrees and precipitation by inches.
WeatherBill hedges their own risk via their weather algorithm and also sells their risk on the back end to a number of hedge funds, in theory delivering a guaranteed profit regardless of the weather.
CEO David Friedberg says that Weatherbill has hundreds of customers and faces such high demand that it needs to bring more people aboard to increase capacity. The site has launched not only in the US but Canada, the UK, the Netherlands, Spain, Germany, and Norway as well.