This climate tech SaaS startup just broke funding records: Here's why that matters...

When The Stack featured Persefoni as our "one to watch" earlier in 2021 the carbon accounting SaaS startup had just raised $3.5 million in seed funding the previous summer and was rapidly building out its team and product -- an “ERP for Carbon Data” that helps companies calculate and disclose their global carbon footprint.

Less than 10 months on, the startup has raised a record $101 million in a Series B (the largest funding round for a climate tech software company) -- participated in by some of the biggest firms out there, including Bain & Co.

The investment is part of a bigger trend: a record $17 billion was invested in climate tech in 2020, according to BloombergNEF data, with more than a fifth of the world’s companies now signed up to net zero pledges.

Investor interest in Persefoni has snowballed amid renewed pressure by regulators on companies to provide more detailed emissions data and as institutional investors ramp up ESG integration pressure. (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.)

Persefoni, founded by former shale gas company Chesapeake Energy’s Chief Digital Officer Kentaro Kawamori in 2019, has built up a progressively more substantial software offering that plugs into existing ERP/other software 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. ESG teams meanwhile can use it complete Scope 1, 2 &, 3 emissions inventories across every calculation type. Along the way, it has poached some of the biggest names in the sustainability reporting world, including the former founding chairman of CDP Paul Dickinson, the former CEO of the GRI Tim Mohin and the founding chairman of SASB, Robert Eccles.

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”.

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.

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