Plan A, a carbon accounting and ESG (Environmental, Social and Governance) reporting platform for corporations, has raised $27 million in a Series A round led by US VC veteran Lightspeed Venture Partners.
Technically the funding is an extension of a $10 million Series A round announced nearly two years ago, which for all intents and purposes means the conclusion of a $37 million Series A round, bringing the total raised to $42 million over its six-year history. . But perhaps most notably, its latest round also includes participation from some of the biggest names in the corporate world, including Visa, Doutsche Bank and BNP Paribas’ VC arm Opera Tech Ventures, among many other angel investors.
“The urgency of the climate crisis, coupled with the complexity of navigating the net-zero journey for businesses, has made it imperative for us to bring in top-tier investors now,” Lubomila Jordanova, founder and CEO of Plan A, explained to TechCrunch.
Founded in Berlin in 2017, Plan A (a reference to the ‘no plan B’ climate action mantra) is one of numerous VC-backed startups emerging from Europe with the express purpose of helping companies measure (and cut) their carbon. footprint. The perennial problem, it seems, is that despite the best will in the world, reducing carbon emissions can be difficult unless a company makes a real effort to find the right one. what Their emissions are, and where They are in the supply chain.
A survey conducted last year by the Boston Consulting Group (BCG) found that 90% of organizations do not “comprehensively” measure their greenhouse gas emissions. As always, so-called “Scope 3 emissions” are identified as a major obstacle, whereby a company fails to reduce emissions through its supply chain, which includes partner businesses. While it is true that Scope 3 is more difficult to measure than Scope 1 (which refers to emissions directly under the company’s control), organizations are under increasing pressure to address emissions across their entire network.
This is important for a number of reasons, but primarily because the carbon footprint of many businesses is largely made up of Scope 3 emissions. For example, the Coca-Cola bottling partner — Coca-Cola European Partners (CCEP) — previously estimated that 93% of its emissions were Scope 3.
Moreover, rather than declining, global energy-related Co2 emissions are still rising, increasing by 0.9 percent in 2022.
“Since the climate crisis is largely defined by the growth of emissions, one of the most urgent challenges and economically viable options is to rapidly reduce the emissions curve, especially for companies,” said Jordanova.
Thus, Plan A has developed a SaaS-based sustainability platform that enables companies to self-manage their net-zero efforts — including data collection, emissions calculations, target setting and decarbonization planning. Crucially, it includes mapping emissions data from all Scopes 1, 2 and 3 and aligning them with global scientific standards and methodologies, including the Greenhouse Gas Protocol and the Science Based Targets Initiative (SBTi).
While the main Plan A product is a web app, customers – including BMW, Deutsche Bank, KFC and Visa – can plug directly into Plan A via an API, which is useful for integrating business and emissions data from numerous applications. Business travel software and business intelligence (BI) tools.
Today, Plan A has 120 employees in Berlin, Paris and London, and with its latest cash injection, Jordanova said it plans to “double down” with several new hires.
“The funding now signals our next phase of growth,” she said. “With the fresh capital, we will double our headcount to expand our market access in Europe with a strong focus on France, the UK and Scandinavia, as well as deepen our platform capabilities.”
Beyond seed stage rounds, climate-tech startups seem to have fared relatively well while the funding landscape is somewhat dry these days, although overall funding in the space is still down compared to last year. The data suggests that this is largely due to a decline in later-stage funding since Series B, with early-stage trends looking slightly better.
However, ESG data in particular seems to be in demand for startups. Climate data startup Persephone announced $50 million in fresh funding last month, following two other European rivals, Sweep and Greenlee, which raised $73 million and $23 million, respectively, last year. Elsewhere, ESG data management startup Novisto secured $20 million in Series B funding a few months ago.
While funding is tight in the startup sector, it appears that investors still view climate tech more favorably than many other sectors, with the overall share of VC dollars rising from 10% to 13% last year, according to Dealerroom data. And this, according to Jordanova, depends on many factors. While other industries have been hit by macroeconomic factors and changing investor preferences, climate technology is developing (relatively) in a big way as the severity of the climate emergency leads to more regulation and pressure on enterprises to change course. too late
“European governments have implemented policies and regulations in favor of clean technology, offering incentives and subsidies to attract investors,” Jordanova said. “Even large corporations are making a commitment to sustainability, investing in startups that align with their goals.”
Julie Kainz, London partner at Lightspeed, said climate will be “potentially one of the most attractive investment themes” in the coming decade. “Addressing the climate challenge is firmly on the policy agenda of governments, corporations and ordinary people; And we strongly believe that pressure from consumers will continue to increase,” Kenz told TechCrunch via email.