Latest A+ round brings total funding to $15.6M led by VC firm Carthona Capital. Clyde Bank Holdings, Antler as well as individual investors also join the latest investment round.
SYDNEY, AUSTRALIA, DECEMBER 13, 2022: Pathzero, a company specialising in the measurement and management of financed emissions, announced it has raised AU$8.6M in a Series A+ round, bringing its total Series A funding to $15.6M.
Pathzero's data-driven tool, Pathzero Navigator, is a carbon reporting and analysis solution created specifically for financial institutions to measure, manage and disclose the financed emissions of their investment portfolio.
The round was led by high-profile investor Carthona Capital. Clyde Bank Holdings, Antler, as well as a number of individual investors and internal executives of the company have also invested. This signals the unique value proposition of Pathzero’s technology and acknowledges the importance of impending regulatory requirements that will mandate the reporting of financed emissions, a vital part of a financial institution’s Scope 3 emissions.
Pathzero Navigator, used by firms including StepStone, HESTA and Carthona Capital, connects financial institutions to their portfolio companies and facilitates the secure flow of carbon information between trusted parties. This allows portfolio companies to feed their (actual) reported carbon data into Navigator, improving the integrity of financed emissions data and providing the platform and common language required for joint decarbonisation actions.
Pathzero has experienced impressive growth over the past few months following the launch of Navigator and has experienced 1,271 per cent YoY growth with a slew of new customers. The company has signed strategic deals locally with several asset managers and superannuation funds, including the national industry superannuation fund for people working in health and community services, HESTA.
Carl Prins, CEO of Pathzero said: “Since the roll-out of Navigator we have seen immense interest from the market and have closed some cornerstone deals. This interest reflects the critical need for technology that enables collaboration between businesses to solve the Scope 3 challenge at scale. The gamechanger for us has been to go beyond carbon accounting and create a carbon information network allowing firms to engage and collaborate with their portfolio companies to bring down emissions.”
“Pathzero is growing rapidly, and we want to ensure we exceed the expectations of newly signed customers. We’ve seen a lot of success with Australian superannuation funds and asset managers. This funding will allow us to double down and deliver an unparalleled experience to those clients while continuing to grow our network both here in Australia and globally through further strategic partnerships,” Mr Prins said.
Moving into 2023 and beyond, it is up to regulators to determine the extent and timing of mandatory financed emissions disclosures by companies. Until then, the Greenhouse Gas Protocol sets the global standard for defining and accounting for Scope 1, 2 and 3 emissions, and The Partnership for Carbon Accounting Financials (PCAF) Standard builds upon this specifically to set clear methodologies for financial institutions to measure financed emissions.
Together, these provide a solid foundation for financial institutions to use until a more prescriptive regulatory direction emerges. Additionally, until such time, the Taskforce for Climate-related Financial Disclosures (TCFD) Recommendations provide a globally recognised framework for disclosures. The TCFD's work also provides the bedrock for future requirements being drafted by the likes of the Securities and Exchange Commission (SEC) in the US and the International Sustainability Standards Board (ISSB).
Mr Prins added: “Since PCAF launched in November 2020, it's seen rapid adoption across the financial sector. Today more than 340 financial institutions have joined, representing over USD$85 trillion in total assets under management. This signals that financial institutions understand regulation on financed emissions is imminent and that PCAF will be the framework to inform the IISB climate-related disclosures standard and TCFD reporting. It's exciting to be on the leading edge of this transition and helping financial institutions to tackle their scope 3 emissions.”
Since inception in 2020, Pathzero has set the standard for corporations and financial institutions to understand and act on their emissions. Pathzero was recently recognised as a rising star in the Deloitte Tech Fast 50 awards. This accolade wraps up a strong year for the company that saw it also named in the Global 100 Impact Start-Ups by Dealroom.co, HolonIQ's 2022 Australia & New Zealand Climate Tech 100, and Fast Company’s 2022 World Changing Ideas Awards.
Dean Dorrell, Partner at Carthona Capital, said: “After first investing in Pathzero over a year ago, we’ve seen the company go from strength to strength. We have every confidence in what their tech offering brings to the wider financial industry and are proud to be early adopters of their services ourselves. As regulation intensifies across sectors, we are looking forward to the years ahead as monitoring and reducing financed emissions becomes second nature to financial institutions.”
Paul Cave, Partner at Clyde Bank Holdings, said: "We are excited to continue our support of Pathzero as they scale and equip more financial institutions with the tools to measure and manage their financed emissions effectively and efficiently. The team continues to impress us with their innovative approach and technology and is well positioned to work alongside Australia’s most influential financial institutions.”
Pathzero enables the measurement and management of corporate and financed emissions. Pathzero's expert consultants and proprietary technology scale the climate expertise of its clients, facilitate consistent carbon data reporting and enable collaboration with business partners to create and execute ambitious net zero plans. Pathzero is committed to building the tools companies need to adapt to a low-carbon future.