Driven by a supportive policy context and the multitude of initiatives introduced by governments across the region, Europe is rising to leadership in the field of climate fintech, being home to four times as many climate fintech companies compared to the US, data from Commerz Ventures show.
This emerging sector, which encompasses companies that provides tracking and analysis of emissions, impact investing, environment, social and governance (ESG) data and reporting, supply chain analytics, and more, has recorded strong growth over the past couple of years, fueled by rising investors’ interest and booming adoption from consumers.
In 2021, climate fintech startups raised a total of US$1.2 billion, a figure that’s three times higher than all previous years combined, according to Commerz Ventures, with European climate fintech startups secured more VC funding than any other region.
To get a sense of Europe’s booming climate fintech sector, we look today at eight fast-growing startups in the region. These have witnessed notable growth over the past year and has secured significant funding from prominent investors.
Founded in 2014, Deepki has developed a software-as-a-service (SaaS) solution that uses data intelligence to help commercial real estate investors, owners and managers improve the ESG performance of their real estate assets. The solution enables customers to collect ESG data, overview their ESG performance, establish investment plans to reach net zero, and assess results. It also allows users to report to key stakeholders.
Headquartered in France, Deepki operates in 38 countries, with team members across offices in Paris, London, Berlin, Milan and Madrid. The company serves clients such as Generali Real Estate, Allianz Real Estate, SwissLife Asset Managers and the French government.
Deepki closed a EUR 150 million Series C in March 2022 which it said it would use to hire new employees, establish and grow its business in the US, and carry out strategic acquisitions. In June, it acquired Fabriq, a UK-based competitor that boasts 40 clients across real estate owners and asset managers.
Descartes Underwriting (France)
Founded in 2018, Descartes Underwriting is a Paris-headquartered insurtech company offering technology-driven parametric insurance and innovative insurance policies to protect companies and governments against natural catastrophes, extreme weather and emerging risks.
Descartes Underwriting applies new technologies such as image recognition or machine learning (ML) combined with new generations of data sources, coming from satellites or the Internet-of-Things (IoT), to assess and manage natural catastrophes and emerging risks.
This makes its products fairer, since all pricing and underwriting is based on advanced data, faster and more accurate at paying claims.
The company is structured as an underwriting agent, underwriting risks on behalf of tier-one (re)insurers and insurance-linked securities funds.
Descartes Underwriting has raised US$141.5 million in funding, its latest round being a US$120 million Series B closed in January 2022. The company said it would use the proceeds to scale its approach to corporate and public entity risk exposures, growing its technology platform, expanding into new lines of business, targeting larger deals, and continuing its global expansion.
Founded in 2020 and headquartered in France, Sweep is the all-in-one carbon tool that helps large enterprises build a science-based and data-driven climate program. The platform enables businesses to track and act on their carbon, making it easy to measure emissions at scale, set smart reduction goals, and contribute to cutting-edge carbon projects.
Sweep applies a network approach to carbon accounting, which allows every carbon-emitting individual, including employees, subsidiaries, suppliers and business partners, to share their data and visualize how their activities are making a difference. Sweep also offers a carbon marketplace which allows companies to couple their reduction efforts with investments and participation in carbon positive projects. The company works with multinationals like Saint Gobain and JCDecaux.
Sweep closed a US$73 million Series B in April 2022, bringing the total of funding raised over the prior year to US$100 million. The company said at the time that it would use the proceeds to scale its platform’s capacity.
Founded in 2014 and headquartered in London, Cushon is a workplace savings business that uses technology to bring innovation to workplace savings and pensions and help people get comfortable with saving and investing.
Employers use Cushon’s workplace savings platform to enhance the financial wellbeing of their workforce by providing them with a simple and convenient way to save as little as GBP 10 per month direct from pay.
A company with a strong ESG focus, Cushon launched last year the world’s first net zero pension, enabling employers to help their people contribute to the deceleration of climate change quickly, easily and meaningfully.
In January 2022, it closed a GBP 35 million round which it said it would use to develop its app and beef up its operations. It recently acquired Creative, which manages the Creative Pension Trust, an auto-enrolment pension scheme. The acquisition marked Cushon’s third purchase in two years, and has enabled the company to “double the reach” of its app-first climate-friendly pension.
Cushon claims it is the fifth largest master trust pension provider in the UK with GBP 1.7 billion of assets under management (AUM) across 400,000 customers.
Founded in 2020, Twig is a London-based new generation fintech, rooted in circular economy principles. Its central mission is to empower consumers to value, unlock, and enjoy wealth they never knew they had.
Twig allows users to offload unwanted items for instant cash, and offset their carbon to plan trees. In addition, users also have access to a set of traditional banking service, including domestic and international bank transfers, and a Visa debit card.
Twig claims it is the fastest-growing fintech app in the UK since its launch in July 2021, growing at a rate of over 100,000 monthly downloads. The startup closed a US$35 million Series A in January 2022 to develop a Web 3.0 green payment infrastructure, and boost the rollout of its current suite of financial products. It also has imminent expansion plans in the US and the European Union (EU).
Founded in 2020 and headquartered in London, Sylvera is the developer of ML-based tools designed to track the performance of carbon offsets. The company leverages proprietary data and ML technology to produce the most comprehensive and accessible insights and market intelligence on carbon projects, which are delivered through an online platform.
Sylvera is also partnering with leading researchers at UCLA, NASA’s Jet Propulsion Lab, and University College London to expand its proprietary methods for evaluating carbon performance.
Sylvera serves corporate sustainability leaders, carbon traders and policymakers. The company closed US$36.4 million in a Series A funding round, bringing its total funding to US$39.5 million.
Founded in 2018 and headquartered in Sweden, Doconomy is a leading provider of applied impact solutions. The company provides digital tools and services intended to empower banks, brands, and consumers to measure, understand, and reduce the environmental impact linked to consumption.
Doconomy’s impact calculation methodology calculates the carbon impact of every single financial transaction, product, lifestyle and corporation, allowing consumers to visualize their impact, receive insights to reduce consumption and be rewarded financially with refunds and other incentives.
Doconomy’s consumer solution is called Do and is a mobile banking service that enable users to understand the impact of their daily choices. Its enterprise service, called Åland Index, is a cloud-based service for CO2 emission calculations for payments and financial transactions with over 1 000 000 users and growing.
Doconomy closed a US$19 million round in January 2022 to help accelerate expansion and the recruitment of new talent.
Founded in 2018, Tomorrow is a German-based sustainable mobile banking platform that helps users manage their finances while reducing their carbon footprint. Tomorrow also invests in community-development initiatives all over the world.
Tomorrow currently offers a current account, sub accounts, shared accounts, a free Visa debit card, cash withdrawals and deposits, as well as personal financial management tools, and more.
Unlike conventional banks, which use customers’ money to invest massively in coal power, weapons and other damaging industries, Tomorrow customers’ funds are used to support sustainable projects and invest in sustainable industries.
Tomorrow is not a bank per se but is partnered with Berlin-based technology company Solarisbank, which holds a full banking license. The startup claims more than 90,000 customers, and has raised more than US$28 million in funding, according to data from Dealroom.
Featured image credit: edited from Unsplash