Accurate weather forecasts are vital to industries like agriculture, and for preventing and mitigating damage from severe weather and natural disasters. But producing accurate forecasts is incredibly difficult, which is why WeatherXM's founders have spent the last 12 years working to improve the accuracy of weather forecasts.
In 2012, Manolis Nikiforakis, Stratos Theodorou and Nikos Tsiligaridis launched an app that allowed community members to provide grassroots-level weather forecasts. They then worked as consultants for corporate clients in weather-dependent industries, such as Athens Airport. Now they are building WeatherXM, a network of community-monitored weather stations that collect and share local weather data through a system built on the blockchain.
WeatherXM CEO Nikiforakis told TechCrunch that the startup already has 5,000 of its own weather stations in more than 80 countries. These stations collect local, ground-based weather information and are monitored by volunteers who are compensated with WeatherXM's own crypto token, $WXM. All collected data is free for anyone to use for personal use, and is available for a fee to companies who want to use it commercially.
“We're big supporters of open source,” Nikiforakis said. “We [WeatherXM’s mission] “It's nothing without collaboration across a range of people and expertise. We're making all this data publicly available for anyone to use. You can see in real time what each weather station is reporting.”
The startup just raised $7.7 million in a Series A round led by Lightspeed's blockchain-focused early-stage fund Faction, with participation from Borderless Capital, Alumni Ventures, Red Beard Ventures, and other venture capital and other types of investors. The startup plans to use the funding to expand its team and position itself to generate revenue from commercial users.
Tim Cooley, a partner at Faction, said he was attracted to investing in the company because it offered a compelling use case as a community-driven blockchain project, with both a supply of people wanting to join the community and a demand for what the company produces. The potential TAM for more accurate weather data didn't hurt, either.
“The collapse of a lot of deep networks is a demand-side problem,” Khoury says, “where the network cannot be sustained over the long term if there is no demand for what is actually being generated or produced.”
As someone who has had my basement flooded many times due to storms that I couldn’t accurately predict, this trade immediately intrigued me, but the blockchain and crypto token aspects of WeatherXM’s strategy initially left me puzzled.
Nikiforakis said the cryptocurrency incentive structure is the only way the local weather network can work. Paying each person who oversees a weather station would make the idea too costly and complicated to scale to the scale the network needs to be effective. He said WeatherXM's structure is meant to incentivize users a bit more, because the company found through its first app that people were willing to provide their weather data for free.
“[Using crypto] It also helps with adjustments [weather stations] “It will be deployed in the areas we care about the most – developing and rural countries,” Nikiforakis said. “The cryptocurrency rewards will act as a coordination tool, and because in many ways this is a community project, the cryptocurrency will act as a governance tool. People can use the token to vote on decisions that affect how the project works.”
I'll admit I'm not bullish on blockchain or cryptocurrencies, but using that structure here makes a lot of sense, and it fits with the startup's focus on open-sourcing the data needed for blockchain technology to really take effect.
Earlier this week I moderated a panel focused on how communities can prepare for climate emergencies and disasters, and a theme that came up again and again was that this data needs to be open source so that public and private organizations can more easily work together to prepare for and better respond to climate disasters.
WeatherXM open sourcing all of its data from its stations, especially in underserved and rural areas, could be an advantage for communities battling the growing threat and damage of weather events without the need for large budgets or resources.
The mission here is easy to support, but it remains to be seen whether putting weather information on the blockchain will generate enough demand to make a real difference.
“For the industry to move forward and for meteorology in general to improve, we need to build an ecosystem around our technology and ideas,” Nikiforakis said. “We don't like the old way of doing things, where things are siloed and only accessible to those who qualify or pay. We're going against the flow. We're opening up our data to everyone.”