Because there is no ‘plan B’
Plan A, a platform dedicated to carbon accounting and ESG (environmental, social, and governance) reporting for corporations, has successfully secured $27 million in a Series A funding round, with Lightspeed Venture Partners, a prominent U.S. venture capital firm, leading the investment. This funding round is, technically speaking, an extension of the initial $10 million Series A round announced nearly two years ago. Consequently, this effectively closes a $37 million Series A funding round, bringing Plan A’s total funding to $42 million over its six-year history. Notably, this recent round also boasts participation from influential corporate entities such as Visa, Deutsche Bank, and BNP Paribas’ VC arm, Opera Tech Ventures, alongside several angel investors.
Lubomila Jordanova, the founder and CEO of Plan A, emphasized the importance of top-tier investors joining their mission, driven by the urgency of the climate crisis and the complexity of helping businesses embark on net-zero journeys.
Established in Berlin in 2017, Plan A, named in reference to the ‘no plan B’ ethos of climate action, stands among several VC-backed European startups focused on assisting companies in measuring and reducing their carbon footprint. The persistent challenge lies in the fact that, even with the best intentions, mitigating carbon emissions proves difficult unless companies meticulously identify the sources of their emissions, including those within their supply chains.
A survey conducted by Boston Consulting Group (BCG) last year revealed that 90% of organizations did not comprehensively measure their greenhouse gas emissions. Notably, “scope 3 emissions,” which involve emissions through a company’s partner businesses and supply chain, presented a significant stumbling block. Although measuring scope 3 emissions is more complex compared to scope 1 emissions (emissions directly under a company’s control), there is mounting pressure on organizations to address emissions throughout their network.
This is critical for several reasons, chiefly because scope 3 emissions often constitute a significant portion of a business’s carbon footprint. For instance, Coca-Cola European Partners (CCEP), a Coca-Cola bottling partner, estimated that 93% of its emissions fell under scope 3.
Furthermore, global energy-related CO2 emissions are still on the rise, increasing by 0.9% in 2022. As the climate crisis is fundamentally driven by emissions growth, reducing emissions is one of the most urgent challenges, and the most economically viable option, especially for companies, as Jordanova explained.
Plan A has developed a Sustainability as a Service (SaaS) platform that enables companies to manage their efforts towards achieving net-zero emissions. This includes data collection, emissions calculation, target setting, and decarbonization planning. Importantly, it covers emissions data across all three scopes: scope 1, scope 2, and scope 3, aligning them with global scientific standards and methodologies, including the Greenhouse Gas Protocol and the Science Based Targets Initiative (SBTi).
While the core of Plan A’s offering is a web application, customers, including BMW, Deutsche Bank, KFC, and Visa, can also integrate with Plan A through an Application Programming Interface (API). This facilitates the incorporation of business and emissions data from various applications, such as business travel software and business intelligence tools.
Currently, Plan A has a team of 120 employees across Berlin, Paris, and London. With the new infusion of capital, Jordanova intends to double the headcount and expand their market presence in Europe, with a strong focus on France, the U.K., and Scandinavia. They also plan to enhance the platform’s capabilities.
Despite the relatively dry funding landscape, climate-tech startups, including ESG data-focused ones, have performed reasonably well. Funding in the climate tech sector has decreased compared to the previous year, primarily due to a drop in later-stage funding rounds from Series B onwards. However, early-stage trends appear more favorable.
Investors appear to have a positive outlook on climate tech, with the share of venture capital dollars in the sector growing from 10% to 13% over the past year, according to Dealroom data. Jordanova attributes this to several factors, including favorable policies and regulations by European governments, incentives, and subsidies for clean tech, and the sustainability commitments of large corporations, all of which align with the goals of climate-tech startups.
Julie Kainz, a partner at Lightspeed in London, noted that climate will likely become one of the most attractive investment themes in the coming decades. She highlighted the increasing strategic importance of addressing the climate challenge for governments, corporations, and the general public, with consumer pressure expected to continue rising.
