But he’s not hearing “no” much, so far. His first pitch, to Y Combinator, provided some idea-stage funding. Since then, a long list of prominent investors has signed on to back the 3-year-old venture, including Bill Gates-founded Breakthrough Energy Ventures, Amazon.com, and Chris Sacca’s Lowercarbon Capital.
Now, with over $24 million in Pachama’s coffers, its founder is preparing to scale up a mission inspired by a trip back to his native South America, where he saw the ravages of deforestation firsthand. Saez Gil said:
“Every government, corporation and consumer should have the ability to contribute back. The idea is that if you want, you should be able to invest with trust, with confidence, into projects that are planting trees, preserving forests.”
While Pachama appears to be the highest recent funding recipient in the climate software space, it’s far from the only startup drawing heightened interest from investors. As more companies and governments declare commitments to reducing carbon footprints, startups offering tools to help meet those pledges are in high demand.
Looking at early-stage funding data for the past few months, it’s clear climate and carbon-tracking software are having a moment.
At least 20 startups doing something at the intersection of decarbonization and software to measure progress have raised funding in roughly the past year, per Crunchbase data. Deals are overwhelmingly seeded and early-stage, indicating that investors see potential for sharp growth ahead. Here are some of the funding recipients:
Why now?
It’s easy to see why carbon tracking and decarbonization software hold appeal, with climate scientists pointing to a future of accelerated warming and potentially catastrophic impacts on myriad ecosystems, should emissions go unchecked.
The question with a less obvious answer is: Why now? After all, we’ve known about climate change and the case for reducing carbon footprints for decades. What are the reasons for a burst of early-stage activity in the space right now?
That’s a question frequently directed at Andrew Beebe, managing director of Obvious Ventures. He says the current investment environment compares favourably to “Cleantech 1.0,” the period in the mid to late aughts when early climate startup investment peaked and crashed.
This time around, the calibre of entrepreneurs is much better, according to Beebe. He’s also seeing enterprises take on carbon accounting at the CFO and boardroom levels, with demand for more sophisticated tools to help track and reduce emissions. Beebe said:
“We can’t manage what we can’t measure. And once you measure … Then you ask the question: What do I do now?”
Carbon meets software
Recently funded startups offer a sampling of options for what entities can do about their carbon footprint.
Fujihara commented:
“It’s kind of a new category we are creating: Decarbonization as a service. Its rollout comes as internal carbon pricing in businesses is becoming the norm, with enterprises looking to meet investors’ environmental standards, offset climate risk and prepare for future carbon taxes.
It’s a scalability thing
One standout trait about the latest crop of climate-tracking startups is that they’re a SaaS-heavy cohort, with a lot of tech credentials among founding teams and investors.
Several of the largest new climate-focused funds, including Breakthrough, LowerCarbon, and Amazon’s Climate Pledge Fund, were launched by investors better known for their tech prowess than environmental creds.
The same often holds true for founders. Pachama’s Saez Gil, for instance, has a resume that reads like a tech startup guy. Previously, he founded Bluesmart, a Y Combinator-backed smart luggage startup. Before that, he launched WeHostels, a mobile travel booking app aimed at young travellers.
It makes sense at this juncture to see more techies moving into decarbonization, Saez Gil said, observing that: “What Silicon Valley has figured out is how to use technology as leverage to scale very rapidly.”
For venture-backed technology companies, we’re used to seeing scalability translate into massive valuations and platforms that go from garage startup to global powerhouse in a few short years. In the climate software space, the hope is not only to grow big companies but also to make a substantial impact in building the infrastructure for a lower-carbon future.
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