The last few years have spawned a slew of carbon accounting startups — which track the environmental impact of companies — and much debate about which of them will stand out from the pack.
Founded in 2016, Berlin-based Plan A is older than most of the cohort and has just raised a $27m Series A extension round, led by Lightspeed and with backing from Deutsche Bank and Opera Tech Ventures, the VC arm of BNP Paribas. A host of founders also put money in, including those behind Supercell, Aiven, Zalando and Wolt.
The raise brings Plan A’s funding to $40m following a $13m Series A in November 2021 led by HV Capital.
The sector cools?
Plan A’s raise is something of an anomaly in the sector this year. Globally, investment into climate fintech — a category that also includes things like climate risk tools and green investment tools — dropped 13% in the first half of this year compared to last year.
That said, it remains more buoyant than the wider fintech sector, which, according to CommerzVentures, saw a 54% drop in funding in the first half of 2023 compared to 2022.
Last year, raises included a $73m round for French carbon accounting platform Sweep, which remains the best-funded accounting tool in Europe.
But this year has seen very few rounds in the category by comparison other than a $13m round for offsetting marketplace Supercritical, also led by Lightspeed, in June this year.
There have been some casualties, too. Planetly, a Berlin-based carbon accounting tool, was acquired by an American company and then closed down just a year later.
Julie Kainz, partner at Lightspeed, which led the investment into Plan A, says she is not concerned about the dip in investment in the wider climate fintech category.
“If we see a certain market trend or product category being so important in the next 10 to 20 years, then even if there’s a one-year slowdown in the broader market that doesn’t really mean that we don’t believe in investing in the category,” she says.
Moving towards continuous reporting
Despite the headwinds, Plan A’s founder, Lubomila Jordanova, is bullish on the potential of the industry.
This year, Plan A’s focus has been on moving away from snapshot reports of a company’s sustainability credentials to an API that continuously monitors metrics. It collects data on carbon emissions and energy usage, as well as things like soil health and water stress.
A lot of companies in the carbon accounting sector are choosing to differentiate themselves by focusing on a particular industry. French carbon accounting company Sweep is focusing on sustainability accounting tools for financial services, for example.
Plan A, on the other hand, doesn’t intend to focus on a particular segment. Its current list of 1,500 customers includes KFC, BMW, Chloé, Deutsche Bank, Visa, Sorare and N26.
Opening new offices
Plan A now has offices in London, Paris, Munich and Berlin. France is a particular growth area and a place where Jordanova spends an increasing amount of her time.
Plan A also plans to open an office in Copenhagen — it’s working with an increasing number of clients in Scandinavia — and to double its headcount to 240 employees by the end of next year.