ICON Advises Fathom on Strategic Investment from Moody’s

Sustainable finance continues to rise up the corporate agenda following a strategic investment in global flood modelling business Fathom

Backing from global risk business Moody’s will grow Fathom’s presence in global markets, across multiple sectors including (re)insurance, corporate risk management, financial services and disaster response

Tech-focused investment bank ICON Corporate Finance has acted as exclusive financial adviser to Fathom, the world-leading global flood modelling business, on its strategic investment from US ratings giant Moody’s.

The investment supports Fathom’s aim of becoming the world leader in water risk intelligence. It also recognises the growing significance and impact that flooding due to climate change has on the global financial landscape as well as government ESG (Environmental, Social and Governance) policy decisions. As part of the deal, Moody’s will assume one seat on Fathom’s Board of Directors.

Founded in 2013 by a team of academics from the University of Bristol’s Hydrology Research Group, Fathom’s data underpins climate risk decision making for its customers and partners in (re)insurance, banking, engineering and corporate risk management, including: Microsoft, Nasdaq, Aon, and The World Bank.

Fathom’s UK flood model is the first of its kind to factor in multiple climate change scenarios to predict the future impact of flooding and enable the calculation of incumbent financial losses. The model, launched in early 2021, revealed that the number of properties in Great Britain at substantial risk of flooding will rise by 24% to 1.35 million over the next 30 years due to climate change.

Dr Andrew Smith and Dr Chris Sampson, Co-Founders at Fathom, said: “Our team of scientists and researchers constantly push the boundaries of flood mapping and risk data. Moody’s in-depth industry knowledge will help us to reach new markets and countries where this detailed level of flood data is urgently required.”

Nicky Cotter, Head of FinTech at ICON, commenting on the transaction, said: “As the leading firm in flood modelling, Fathom appealed to a wide range of investors including world class VC and CVC leaders from Silicon Valley to New York and London, and we are delighted to have supported this transaction with such a powerful strategic investor as Moody’s.”

Monica Shupikai Simmons, Director at ICON, added: “Fathom’s global flood modelling is at the forefront of emerging climate change data analytics. We are proud to have advised Fathom on this milestone investment from Moody’s, which we believe further accelerates the significance and growth of ESG and sustainable finance.”

Last year, natural disasters produced an estimated economic loss of $210Bn, up 26% from 2019. Of this, flooding in China was responsible for the highest loss from an individual event of $17Bn. Losses are expected to rise due to the increasing unpredictability and severity of extreme weather events. In order to reduce the impact of increasing flood hazards, improved modelling of flood risk is paramount.

Commenting on ICON’s adviser role on the Moody’s deal, Andrew Smith said: “We’re very grateful to have worked with Monica, Nicky and the team. Aside from managing the round, they guided and supported us each step of the way, which was tremendously valuable. The result was a deal that we’re all delighted with.”

This transaction highlights ICON’s global track record and expertise in cross border transactions, following recently completed deals including Quantex sold to US Dover owned PSG, JoinedUp sold to US Beeline, Paragon’s sale to US based Aptean and Beyonic’s acquisition by MFS Africa. It further proves ICON’s role as a leading adviser to outstanding technology growth businesses and adds to ICON’s track record of over 300 successfully closed transactions.

Fathom’s legal advice was provided by Ashfords LLP.

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Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.