French startup Greenly has raised a $23 million Series A round. The company has built a software-as-a-service platform that lets you calculate your company’s carbon emissions, store and track them in one place, generate a certified report of your carbon footprint and get some insights about ways to reduce your emissions.
Energy Impact Partners (EIP) and XAnge are leading today’s funding round. Several business angels are also participating in the round, such as Jean-Baptiste Rudelle.
Greenly isn’t the first carbon management startup — competitors include Sweep, Persefoni and Watershed. But Greenly focuses specifically on small and medium companies. And the market is still mostly dominated by big consulting firms.
The company tries to automate as many steps as possible with integrations with dozens of data sources. After that, Greenly helps you go one step further with instructions to improve your reporting process and get more granular data. It can then generate a carbon report that follows the Greenhouse Gas Protocol.
Customers who start using Greenly first connect the service with their accounting and financial data. The startup is using Codat to integrate seamlessly with a wide range of financial services.
For low-priority items, Greenly can automatically calculate an estimate of carbon emissions. For instance, some software companies publish a dollar-to-carbon ratio in their own carbon footprint reports. If you spent $850 in Salesforce product, Greenly can evaluate the carbon impact of that.
For bigger sources of emissions, the platform can ask you questions to specify what you bought exactly. Greenly has gathered hundreds of thousands of data points from public database. It tries to learn over time so that you don’t have to answer the same questions over and over again.
“We started with financial and accounting data, but we are progressively adding more data sources,” co-founder and CEO Alexis Normand told me.
The startup is building out integrations with electricity providers, cloud services or e-commerce platforms. For instance, Greenly can automatically fetch your Shopify inventory or the number of vCPUs you are using in your cloud infrastructure.
But the most difficult part of the carbon footprint equation is what’s happening upstream and downstream. How can you evaluate the carbon impact of your suppliers?
Greenly has turned this hurdle into an advantage as it creates a viral loop. Customers can send a link to a Greenly portal to their suppliers so that they can share more information about their carbon emissions.
“If you want to go further, you have to engage your suppliers. We ask our clients to send a request to gather more granular data. After that, we consolidate everything once we have all the information, and we can grade suppliers,” Normand said.
Once these suppliers have tried the product, they can start using it for their own company. “We want to build the Quickbooks of the carbon footprint,” Normand said.
There are also some legal requirements that are fostering this software industry. For instance, in France, companies with more than 500 employees have to release a carbon report. In a few years, the limit will be lowered to 250 employees.
90% of the startup’s customers are SMEs, but some bigger companies are also using the platform to compare their suppliers. Once you have onboarded all your suppliers on the platform, you can choose to work more with one over another due to environmental criteria.
There are 400 companies currently using Greenly. While most of them are currently based in France, the company has opened an office in the U.S. to address the American market.