Betting on a hotter world: the business case for urban heat resilience

Gavin Allen: Do you expect to see a surge of investment into climate adaptation tech?

Ulrich Seitz, Venture capital investor & Entrepreneur

Ulrich Seitz: It’s still early, but the shift is underway. Until recently, big venture capital funds had been focused predominantly on decarbonization. But over the last 18 months, their focus has widened to encompass climate resilience and adaptation. Southern Europe faces heat waves, droughts, and water scarcity. The World Economic Forum calls extreme weather the biggest risk for humankind. In short, investors are starting to realize that ignoring resilience simply isn’t an option.

Gavin Allen: What makes you confident that urban heat and resilience will become a key focus for investors? Are you ahead of the curve on this?

Ulrich Seitz: I don’t feel like a lone wolf. Our Adapt Your World conference showed just how many major investors are paying attention. Venture capital is always about anticipating tomorrow’s markets, not today’s. And with climate impacts intensifying, resilience is set to become a global mega-trend.

Insurance companies are already far ahead in assessing climate risk because it directly affects their balance sheets. They’re developing tools to help customers deal with climate impacts, while keeping assets insurable. That’s a sign of where the broader market is going.

Gavin Allen: How do you make the case that cooling-city solutions aren’t just profitable, but scalable as well – that there are big returns to be had?

Ulrich Seitz: Urban-heat resilience attracts many kinds of investors: infrastructure funds, private equity, venture capital, and technology-focused investors. But for tech investors like me, the key is scalability. Without scale, you can’t justify the risk.

And we are seeing scalable solutions emerge. For example, Amperial Technologies, a German company, make a window film that blocks heat-carrying infrared light while still letting in visible light. This cuts cooling demand significantly—an enormous opportunity when you think of how many modern buildings have glass façades.

Gavin Allen: Will cities learn from each other and scale these ideas?

Ulrich Seitz: Yes, and that process is accelerating. Major German cities have departments dedicated to long-term flood-risk planning. They’re using satellite and sensor data to understand how water moves through urban areas, where wildfire risks are greatest, and how heat behaves at the neighborhood level.

Cities learn from each other when the data reveals the same patterns: increasing heat, rising risk, and growing costs. That creates momentum to adopt and scale new solutions.

Gavin Allen: Adaptation, not just mitigation, seems to be getting more attention. What's changed in the investor mindset?

Ulrich Seitz: I spent years as a traditional climate-tech investor focused on decarbonization and energy transition. The investments were successful, but something bothered me: were we really improving people’s lives in the near term? Decarbonization addresses long-term hardly tangible risks. Adaptation addresses the problems people face today.

That’s why I created the Adapt Your World conference: to raise awareness and broaden the investment scope. Real-world impacts are happening now. The urgency and the opportunity are obvious.

Gavin Allen: What technologies do you see as most promising for addressing urban heat?

Ulrich Seitz: Beyond new materials, the biggest levers we have are data and AI. They are the real game-changers.

Aurora Tech, a Munich-based company, who were on stage at my conference, use data to model how wildfires move in real time. It’s extremely complex, but better data helps authorities make smarter decisions: where to intervene, how to minimize damage, and how to build back more safely afterward.

AI also improves how we understand heat at the micro-scale—street by street, building by building. With rich data, we can design cities more intelligently.

Gavin Allen: Presumably AI will reshape industries like insurance and banking, as well?

Ulrich Seitz: Absolutely. We’re at the beginning of a major mindset shift. Insurance companies and banks hold enormous assets. To value those assets accurately, they need to understand extreme-weather risks.

Vida Technologies, another company that spoke at the conference, provides precisely this insight. It tells asset owners how their infrastructure performs under different climate scenarios and what steps can improve resilience.

We don’t yet know exactly which solutions will win or scale fastest, so diversification is essential. But the direction is clear: reducing climate risk has real monetary value. As more investors understand this, markets will accelerate.

Gavin Allen: When do you think we'll get to that tipping point?

Ulrich Seitz: I think we are at the beginning of the curve. The political conversation has shifted—people are no longer focused solely on decarbonization. Even leaders like Bill Gates now speak more openly about resilience and adaptation as key strategic pillars. Within five years, adaptation will become a mainstream investment category.

Gavin Allen: Is this a no-lose bet for an investor?

Ulrich Seitz: I’m afraid there’s no such thing. But the odds for climate-resilience solutions are strong, because the need is universal and growing.

Gavin Allen: You’ve said you were inspired by Arnold Schwarzenegger's book “Be Useful.” If the Terminator himself was looking at the urban heat challenge, what would he be telling investors and innovators to be useful about?

Ulrich Seitz: It means asking: Where can we positively impact the most lives? The answer is dense urban areas facing extreme heat or flood risk. But usefulness must be paired with profitability. If a solution isn’t scalable, it won't create meaningful change.

Charity can help locally. But to improve living conditions at scale, you need business models that grow. That’s “being useful” in a way that truly matters.

Gavin Allen: What more can major technology firms, such as Huawei, do to help?

Ulrich Seitz: A great deal. Innovation and investment in resilience represent a huge opportunity. But mindset matters, too: both profitability and better living conditions should be part of the equation.

Investors also need partners and ecosystems. No one wants to invest alone. That was the whole idea behind Adapt Your World: to bring people together so they could see they weren’t alone, broaden their investment scope, and create intersections between sectors. Once that happens, momentum builds and several climate adaptation investments have taken place after the conference.

Gavin Allen: So, you're creating that ecosystem and that knowledge awareness?

Ulrich Seitz: Exactly. Individual investments always carry risk. But the concept of investing in climate adaptation is not risky. It’s like investing long-term in the stock market: unless the global economy completely collapses, you’ll likely be pleased with the outcome.

Climate-resilience investing follows the same logic. The needs are great, the trends are clear, and the potential for scalable impact is enormous.