37 million ways investors changes their mind about verification

When SustainCERT was launched in 2018, the voluntary carbon market hype had not yet started and climate impact verification was not on investors’ radar.

So, what changed? In light of our recent $37 million Series B announcement only two years after Series A, we asked Marion, our CEO, to reflect on her journey and the market’s growing interest in climate impact verifiers.

Marion, you launched SustainCERT in 2018, what do you remember of those early years?

In the early years, we needed to show early success and persevere. Every time I tried explaining to investors and the media why verification was core to our value proposition, they didn’t know what I was talking about. We were super lean and worked hard to deliver value to our corporate customers because we knew it was critical, at the time, to show early commercial traction. In parallel, we invested early in the SustainCERT platform to demonstrate we could digitize verification and make it scalable.

With a small team of 20+ passionate climate professionals, we engaged with corporates and civil society leaders to shape the future of scope 3 accounting via the Value Change Initiative. A topic with little to no attention and quite a bet, as the market wasn’t ready for it yet. We persevered.

Early client traction and investments in our tech stack proved critical in securing Series-A funding.

SustainCERT closed its Series-A in 2021. What was the market like for climate start-ups then?

In 2020-2021, venture capitalists (VC) were looking for tech-native companies promising to fix corporate carbon reporting instantaneously, and most of them had never heard of verification. They couldn’t place SustainCERT in the climate ecosystem – except for a subset of investors that recognized the role of verification in a market needing credibility. This enabled the business to raise $10 million in late 2021.

When we closed our $10m Series-A in 2021, other climate tech start-ups in earlier stages were raising 10 times this amount. I was excited for them, and thrilled to see climate action getting so much attention yet I could not quite get my head around it. Given the amounts invested, VC’s limited understanding of climate accounting and carbon market dynamics was unexpected. We were lucky to meet Citizen Capital and Innovacom's Teams, as they quickly bought into our positioning as a digital climate impact verifier. The backing of Microsoft Climate Innovation Fund helped too. A bit of luck and a lot of work as they say!

What changed between the Series A and the Series B?

Well, quickly after the Series-A the market started to turn. Macroeconomic conditions with post-covid economic impacts; Russia’s war in Ukraine and the climate tech sector not delivering on its (too aggressive) promises led to a significant reduction in VC investments and, with it, a growing level of sophistication for those who continued to invest. More and more investors saw a need for credibility. This meant a shift in interest towards “climate native” companies as opposed to pure tech players with no climate background and towards the verification industry.

Someone I admire used to tell me: ‘Events are neutral, what matters is what you make of them’. So, mid 2022, when the market started hitting a low and our message ‘to drive credibility in climate action’ started to resonate more broadly, we decided to be bold and launch our Series-B ahead of schedule. This proved to be a winning strategy. With our growing customer portfolio and the expanded team now including new functions such as Product and Customer Experience, we quickly got traction with VCs and could close our latest and largest capital raise. And all of that despite the macroeconomic downturn.

We will continue pioneering digital solutions to increase the speed, accuracy, and scale at which climate impact can be verified. The Series B funding will support the scaling of our recently launched value chain decarbonization impact solution for Scope 3 emissions and our soon-to-be-launched digital verification solution for carbon markets. 

We are all after impact, and the truth is we need independent verification to make credible climate action the new normal.