Shaping the Future of Carbon Accounting - Why we invested in Greenly

We are thrilled to announce our lead investment into Greenly's recent Series B funding round, securing $52 million. Alongside us in the round were new investors, Benhamou Global Ventures, Move Capital, HP Enterprise, and HSBC, with continued support from XAnge and Energy Impact Partners. We’re thrilled to partner with Greenly as they continue to solidify their position as the go-to operating system for carbon emissions. 

Founded in 2019 and based in France, Greenly has emerged as a key player in Europe's carbon accounting scene. Primarily designed for SMEs and mid-market companies, its software makes it easier and more affordable to measure, control and reduce GHG emissions. The company has experienced rapid growth with ~2,000 clients across 20 industries and 3 geographies (Europe, UK and US) and over $10 million in annualised revenues. It's not just numbers; the platform's value is highlighted by partnerships with major corporations such as HSBC, BNP Paribas, Workiva, Hewlett Packard and AXA Partners. 

Why We Invested 

Strong market tailwinds & market demand towards Climate transition 

The current regulatory environment, coupled with the Net Zero targets of major international enterprises, acts as a significant catalyst for Greenly. At the end of 2023, the global market of carbon accounting was valued at ~$15bn and projected to grow to ~$65bn by 2030 (1). Specifically, the introduction of the CSRD in Europe mandates comprehensive carbon emissions reporting for companies with more than 250 employees, starting in 2024. This directive aims to increase transparency and support sustainable investment decisions. Similarly, under the EU’s SFDR (in effect since 2022), asset managers like Fidelity are required to report on emissions stemming from their investment portfolios (“financed emissions"), highlighting the industry's push towards greater transparency in investment-related environmental impacts. These regulatory developments will pose a challenge for traditional consultancy-based reporting methods, which are often labour-intensive. They won’t be able to cope with increasing reporting volumes, emphasising the need for automated and tech-enabled solutions like Greenly.  

Tech-first platform 

Greenly has developed a robust tech-first carbon management platform with automation as its core, capable of servicing thousands of clients at scale. They enable organisations to navigate the complexities of carbon accounting with ease, making the whole process from data collection to emission tracking straightforward by leveraging the latest technologies (API connections to accounting systems, AI, etc.). This tech-first approach sets them apart in a market where most players still heavily rely on consultancy and manual interventions. It enabled them to maintain attractive margins and provide clients with a cost-effective platform offering a significant edge over the competition.  

SMBs and supply chain focus

Greenly has effectively adopted a similar strategy to HubSpot’s, focusing on SMBs with a tech-centric product and building out functionality over time to service large clients. By providing a platform that is both intuitive and affordable, they have democratised access to carbon accounting for a segment previously overlooked by consultancy-based solutions. They quickly attracted a wide range of clients from various industries and are now expanding into the mid-market and enterprise segments, leveraging their enterprise-ready platform, which has already been used by some consulting partners for their large clients. Greenly’s SMB-first strategy has proven effective, drawing in ~2,000 clients and creating a vast database of emission factors from the data of more than 20,000 suppliers. This database fosters powerful network effects, particularly beneficial as shared suppliers among clients facilitate the acquisition of larger accounts. Greenly fills a significant knowledge gap in the market by enabling organisations to understand their supply chain emissions (Scope 3), which typically constitute the majority of their carbon footprint (>70%).  

Impressive Founding team laser focused on execution  

In an industry where entering the market is relatively straightforward and product differentiation could be difficult, the importance of execution cannot be overstated. We’ve been impressed by Greenly management team and their ability to utilise data and analytics in every aspect of their operations to drive decision, from product development to marketing strategies (rapid feedback loops). The founders, drawing from their past careers at Withings – a digital health company acquired by Nokia in 2016 – have embedded a culture of data from the outset. Alexis Normand (CEO) and Matthieu Vegreville (CTO) worked together on building Withing’s B2B division, which focused on securing data transmission from health devices to professionals. They have brought the same focus on data accuracy, reliability and security to Greenly. Arnaud Delubac (CMO), previously in charge of digital communication at the French Prime Minister's office, adds a creative flair and guerrilla marketing to the team. Their marketing strategy has been successful in achieving organic growth by utilising an effective SEO approach and messaging tailored to specific industries, resulting in over 150k monthly website visits. Together with Laetitia Carle, the COO, and a dedicated team of ~150 employees, they’ve driven Greenly to a double-digit ARR business across three geographies (~50% outside of France) in 3.5 years. They have done so while being capital efficient, which is a testament to their operational excellence. 

Across each of the above factors, Greenly’s impressive leadership team has been carving the way forward. Their commitment to making carbon accounting accessible to all, combined with their expertise in product delivery, sets them apart. We are excited to continue to work alongside management as the company continues into its next phase of growth and establishes itself as a category leader in carbon accounting.  

If you are a founder or operator in the climate fintech space then please reach out to one of the team!

Sources:

[1] Fortune Business Insights