The world is finally starting to take notice of the urgent need for action on climate change. Many big corporations have set ambitious net-zero emissions targets, but that alone will not be enough to make a significant impact. To truly tackle this global issue, we need trillions of dollars in investment and government action. However, these net-zero goals have sparked a ripple effect that is starting to impact all levels of the supply chain, including those responsible for Scope 3 emissions.
“If you’re in somebody’s Scope 3, and this company has made some hard commitments, they’re going to put pressure on you,” explains Alexis Normand, co-founder and CEO of Greenly. “For a lot of mid-market companies or SMBs, if you’re not able to be part of that bigger company’s reduction strategy, you’re essentially locked out of procurement.”
This pressure to reduce emissions is trickling down to smaller companies that may not have the resources to track their carbon emissions. That’s where Greenly comes in. As a company focused on sustainability, Greenly offers carbon accounting software to help smaller businesses accurately track their emissions. By pulling in data from various sources such as utility bills and financial records, coupled with their own data and algorithms, Greenly can calculate carbon emissions for different categories and scopes.
The demand for Greenly’s services has been growing steadily, with over $10 million in annual recurring revenue in 2020 alone. As a Paris-based company founded in 2019, Greenly has ambitious plans for the future, aiming to double their ARR annually in the coming years.
With this growth in mind, Greenly is expanding their offerings beyond company-level carbon accounting to include life cycle assessments for individual products. These assessments can often take weeks or even months to complete manually, but Greenly’s automation-heavy approach aims to streamline the process and provide more comprehensive results.
“In some industries, it is more and more of a requirement,” says Normand. “Like in the manufacturing space, you can’t sell to General Motors or Ford without giving the carbon footprint of every single spare part. In the garment industry and the construction industry, it’s becoming the same thing.”
In order to fund this expansion and further their impact on sustainability, Greenly recently raised a significant $52 million in a Series B round of funding. The round was led by Fidelity International Strategic Ventures and included participation from Benhamou Global Ventures, Energy Impact Partners, Hewlett Packard Enterprise, HSBC, Move Capital, and XAnge.
Despite the challenges that many climate tech startups face in securing funding beyond the early stages, Greenly’s success in obtaining a sizable Series B funding is a promising sign for the industry. By applying a tried and tested SaaS business model to climate tech, Greenly has gained the support of venture investors who recognize the potential for business success while also making a positive impact on the environment.
While this may not mean that the middle rounds of funding will suddenly become more accessible for other climate tech startups, it does show a growing acceptance and interest in this sector. With more investors willing to support and fund sustainable businesses like Greenly, the entire industry may benefit from this positive change.
