FILE PHOTO: U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
NEW YORK: Watershed Technology Inc, a software startup that helps companies track and reduce their greenhouse gas pollution, has closed a US$100mil Series C fundraising.
That brings its valuation to US$1.8bil and reflects the growing pressure around carbon disclosure.
A wider embrace of carbon accounting has been “15 years in the making, and now it feels like it’s arriving all at once,” said Taylor Francis, a co-founder, reflecting on conversations he had with executives from a diverse range of industries meeting in Davos last month for the World Economic Forum.
“Climate business is becoming the business.”
A metric that Watershed uses to measure its own progress is the “carbon under management” by its hundreds of customers.
The more clients it adds, the larger that number – currently 479 million tonnes of carbon dioxide or almost 1% of the global total – will grow.
First, they want this number to get bigger, as their business expands. Then, as Watershed helps companies embrace and shrink their pollution levels, the carbon under management should diminish, too.
The funding round – led by Greenoaks, an early customer and investor, with participation from Sequoia Capital, Kleiner Perkins and others – will help expand operations.
Global standards for corporate carbon accounting – the Greenhouse Gas Protocol – were first developed more than 20 years ago.
Since then, entrepreneurs have developed software to help companies better measure their emissions and disclose them with varying degrees of success.
The exercise has become particularly thorny since the need for supply-chain carbon accounting (known to insiders as “Scope 3” emissions), became more common.
Watershed in four years has attracted clients that the company says include four of the six biggest banks and six of the 10 biggest private equity firms.
It doubled its employees to 300 last year, and projects further growth to 500 people by year’s end. Watershed acquired an early environmental data firm VitalMetrics last year.
Watershed’s founders and investors see corporate attention on emissions growing more focused amid the continued rise of global greenhouse gas pollution and its effects on, among other things, extreme weather and rising seas.
Businesses are also increasingly aware of the risks climate change poses to the economy. — Bloomberg
