Carbon accounting software-as-a-service (SaaS) provider Persefoni has raised $101 million in a landmark Series B funding round that brought in some of the biggest names in the market, including Bain & Co.
Persefoni has catapulted to the forefront of the emerging carbon accounting and reporting software market amid renewed pressure by regulators on companies to provide more detailed ESG data.
In the UK alone, for example, over 1,300 of the biggest UK-registered companies and financial institutions will soon have to make a range of climate-related disclosures under rules becoming mandatory in April 2022.
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Just 15 months after its $3.5 million seed funding round Persefoni, founded by former shale gas company Chesapeake Energy’s Chief Digital Officer Kentaro Kawamori, the company has built up a progressively more substantial software offering that plugs into existing systems to help asset managers, banks, and other financial institutions calculate their financed emissions footprint in a manner that is auditable and compliant with Greenhouse Gas Protocol and the Partnership for Carbon Accounting Financials (PCAF) methodologies.
As Verdantix analyst Connor Taylor put it: “The size of the Series B funding for Persefoni and the range of investors involved sends a powerful signal that there is clear demand for strategic spend on carbon accounting, climate risk and net zero emissions software. In short, this is about validating the market.
“Secondly, a horde of competitors will aim to replicate the financed emissions functionality offered by Persefoni given the traction they have achieved. Thirdly, software vendors with existing products for the enterprise carbon accounting market… will need to raise more capital to compete with the resources that Persefoni have acquired”. Rivals will also, he noted, “in some cases overhaul outdated technology stacks to ensure they can scale up across thousands of customers and more granular data sets”.
As Kawamori put it: “The market is rife with data and software solutions that create new proprietary methodologies every day, and our customers are exhausted with that approach. We work daily with the world’s preeminent industry standards setters and regulators to enable transparency and trust at the highest levels. As disclosure requirements continue to accelerate, every CEO, CFO, and Board Director is looking for a solution they know was purpose-built for the enterprise first.”
Persefoni now boasts four of the 10 largest global Private Equity firms and four of the world’s 20 largest banks as customers using it to calculate and disclose their financed emissions footprint, along with several global insurance companies and pension/endowment funds. (A record $17 billion in venture capital was invested in climate tech in 2020, according to BloombergNEF data, but Persefoni’s raise sets a fresh record for VC funding for a SaaS company with a sustainability focus).
Prelude Ventures and The Rise Fund led the round with first-time participation from Clearvision Ventures, Parkway Ventures, Bain & Co., EDF Group through its corporate venture arm EDF Pulse Holding, Sumitomo Mitsui Banking Corporation (SMBC), The Ferrante Group, Alumni Ventures Group, and New Valley Ventures. Existing investors including NGP Energy Technology Partners, Sallyport Investments, and strategic angels also returned to participate.