Further funding for sustainability reporting: Sweden world friendlyAn early mover platform focused on building digital infrastructure to support supply chain transparency and meet organizations’ ESG (environmental, social, governance) reporting needs, has raised €10.2 million in Series A funding to step on the growth gas have received.
Series A was led by SEB Private Equity, which is part of Nordic corporate bank SEB, with existing investors Brightly Ventures and Spintop Ventures also participating. This increase raises the total amount of Worldfavor to €13.4M.
Over the past five+ years, a growing number of supply chain transparency and sustainability reporting startups posing as consumer pressure on ethical and environmental issues (not to mention the frustration with ‘greenwashing’) has built up a head of steam – combined with increased attention and tougher reporting requirements from policy makers, such as those linked to EU regulations european green dealThe block is aiming to be “climate-neutral” by 2050.
Worldfavor co-founder and CEO, Andreas Lilzendahl, says he welcomes the thick pack of sustainability reporting players – envisioning a future of rich collaboration and startup opportunity to meet increasingly broad and underlying reporting needs.
“We are very happy that there are more and more players in the field. There is still room for many, many different players because there is one big problem – there are so many different needs in this space,” he tells Meczyki. “Different regions have different needs and so on.
“Over time I think we will see an ecosystem where players in the ecosystem will collaborate more than they are today.”
For now, Worldfavor’s positioning looks like a broader platform play versus some of the more specialized reporting/transparency tools that are emerging to cater to specific industries or products. “We strongly believe [being a] composite industrial [tool] – to make it easier for a single company to share their information to multiple actors, reducing the reporting fatigue that they currently have,” he confirmed, noting: “We have multiple stakeholders – buyers, investors , large corporations.
“It’s like a network problem because companies are more connected to each other than ever before and we don’t know that much between companies… You need to understand what you are selling you cannot understand yourself – you need to ask your manufacturer and the manufacturer needs to understand the fields in different levels,” he explains, explaining that cross-cutting ESG in complex global supply Why chained a platform approach to reporting makes sense.
The startup, founded in 2016, says its network is being used by more than 25,000 organizations in more than 130 countries to access and share information to aid decision-making related to ESG goals – such as CO2 To reduce emissions or to respond to human rights concerns.
Customers fall into three main buckets, per Lilzendahl: procurement organizations with a focus on supply chain sustainability; require investors and private equity firms to perform due diligence on their portfolios and/or potential investments; And larger businesses that need reporting to wrap up their subsidiaries can also understand the ESG trajectory of the entire group.
Getting Worldfavor’s network off the ground requires enough provider data to flow through in the first place to create the kind of utility that’s capable of building momentum — but here, in more than five years, the mission is easier. Feeling as the network effect kicks in and works to grow and deepen partnerships.
Policy makers’ shift towards sustainability is also poised to drive demand in the near future.
Lilzendahl says the team tackled the ‘chicken and egg’ startup problem by focusing on getting larger entities on board, signing up installments of suppliers and reporting data to move those businesses onto their supply chains. encouraged to start.
But he argues that there is increasing incentive for providers to plug in because doing so means increasing their visibility to WorldFever’s network of data accessors who are looking for suppliers they can measure. Huh. In other words, having data already accessible through your reporting platform can have a competitive advantage. “Providers find the value of sharing information on the platform to one or multiple stakeholders – understand where they are today and be able to more easily learn how they can improve their own operations,” they said. suggest.
An important point to note is that the data providers in Worldfavor’s platform are self reporting data – so it is not actively auditing any of these ESG-related claims; Rather it is shooting for increased transparency (and access to data), bringing in some ‘disarming sunlight’ and endorsing higher standards of accountability. (Though the latter delivery is potentially a new startup opportunity for teams focused on innovating around verifying/auditing data — which will position itself to partner with platforms like Worldfever.)
“The first basic need is an infrastructure that enables information to flow more easily,” argues Lilzendahl. “Then we make sure the information is shared with super transparency – who shared it, when, and so on, so you can trace back as well.”
He says the team has some tools at its disposal to offer some basic checks on the report, which is a bit of analysis and comparison. But it hopes to develop more sophisticated tools, and even some form of automated auditing, whereby it will apply machine learning techniques to catch false reporting with odd-looking claims or changes in reporting history. can identify.
Emissions reporting requirements have already triggered some major scandals So the incentive to cut corners (or worse) and let out ‘ESG hot air’, may well remain like a bad smell, even as transparency increases across industries and sectors – hopefully – Makes it harder to work against bad actors. Far from spurious of the major types of consistency data.
But for now, Worldfavor’s focus remains on its increasing use for serious scale shoots – so self-reporting (versus proactive auditing) is clearly the more scalable strategy for that. “Perhaps a dream in the future is that information can be self-audited, but only as we increase transparency among companies,” he argues, “our main mission today is to create the transparency that is missing – completely missing from.”
The plan with the Series A fund is growth on all fronts: the data provider, the data accessor and, according to Lilzendahl, the number of data transactions happening in the platform on a daily basis. They are certainly shooting for arrest with the customary eye on scaling the startup on a sustainable footing as a business. “We have big goals,” he says. “We are growing a little over 100% when it comes to annual recurring revenue – and a little more, doubling, when it comes to the user base. And we are very happy with that.”
Commenting on the funding in a statement, Babak Etemad, Director of Investments at SEB Private Equity, said: “We are excited to join the influential team at Worldfavour to raise the bar on sustainability and help organizations share critical sustainability-related information. We are confident that WorldFever will continue to play an important role in this industry in the coming decade, and we look forward to supporting them on the journey.”