I’m thrilled to share some very exciting news! Net Purpose has raised £10 million in Series A funding. This is a major milestone for us, and a significant step towards our vision of making impact investment effortless for all investors by 2025.
This round marks a pivotal moment in the race to achieve climate and other Sustainable Development Goals (SDGs), and a coming together of climate, venture capital and capital market investors. The round, led by ETF Partners, with participation from M-Tech Capital and Exceptional Ventures, and existing investors Jim O’Neill (former Chair of Goldman Sachs Asset Management), Kevin Gould, (Co-Founder IHS Markit), the Louis Family, Illuminate Financial, and Revent, will help us accelerate the tools investors need to power billions in sustainable funds.
The race to achieve climate and other sustainable goals
Sustainable investors have a huge role to play in helping us meet urgent climate targets and the UN’S 17 Sustainable Development Goals (SDGs). Every investor in the world needs access to sustainability data by 2025 – or sooner – so they can be sure they’re directing capital towards the most innovative, most impactful businesses.
That’s our mission at Net Purpose. So far, we’ve been laser-focused on a specific group of users: we built our product to meet the needs of the world’s most sophisticated impact and sustainable investors. Our clients control the flow of enormous amounts of capital, and are committed to measuring their social and environmental performance as rigorously and effortlessly as they measure financial return.
At our core, we knew that if we could create a fact-base that worked for these investors, we’d be laying strong foundations from which to expand our offering to the wider ecosystem. And it worked: In the 2 years since we launched, Net Purpose has become a leading provider of investment-grade data on the social and environmental performance of companies and funds. In that time, we’ve seen 10x growth, and now power $50 billion in sustainable funds.
Now, we’ve raised Series A to enable us to put Net Purpose in the hands of more investors, and mobilise billions towards achieving Sustainable Development Goals.
Why we built Net Purpose
I’ve always been inspired by the power of capitalism, and believe in its ability to achieve a sustainable world. Prior to founding Net Purpose, our team had unique opportunities to drive multi-billion-dollar transactions at Goldman Sachs, to extend $20 loans to inspiring microentrepreneurs in Peru, to build a framework that measured social returns as rigorously as financial returns at LeapFrog Investments, and to-co-build the standards for sustainable investing with UN PRI, B Lab, the Global Impact Investing Network, the Impact Management Project, the IFC and more.
Today, 80% of global assets – around $120 trillion – are committed to sustainable investment. A decade ago, it was only 6%. That shift towards sustainability represents the largest transformation of capitalism the world has ever seen. But one problem persists: performance. While there’s a lot of talk about sustainability, there are still very few facts. Despite an abundance of ESG scores and company disclosures, it’s still almost impossible for investors to report on portfolio companies’ performance against sustainability goals. A gap of this size in financial data would be unthinkable: to put it into context, there’s a $33 billion market for data to help investors make decisions about financial return.
The lack of facts about social and environmental impact puts investors, and the world, in a difficult position. Investors are under pressure from their clients and regulators to report on the sustainability of the businesses they invest in, and can’t. ESG measures financial risk, not social and environmental return. Some have tried to combat the issue by hiring their own teams to research, scrape and compile data. But even if that were effective, it’s not scalable. Without a solution to this problem, investors aren’t able to move fast enough to achieve the SDGs BY 2030.
How our Series A fundraise will help us achieve global goals
That’s why we built Net Purpose. We’re an independent, investment-grade fact-base for the social and environmental performance of companies and portfolios. Our core mission is to make impact measurement effortless for every investor in the world.
Today, we power instant impact reporting for $50 billion in sustainable funds. With this fundraise, we’ll be launching new tools to help investors optimise the sustainability of their portfolios, in the same way as they optimise financial return. We’ll also make our data available to more participants, so all investors have a common fact-base from which to achieve the SDGs.
Series A will be invested in three key ways:
Expanding the coverage of our unique data set
Data remains the biggest problem in the market, and the Net Purpose dataset is entirely unique. No other platform provides the same level of coverage or quality. We’ll be adding more sources and continuing to work on cleaning, structuring and standardising it, so it’s even more useful for benchmarking, decision-making and reporting.
Building new tools for a wider range of investors
We’ve seen success so far by building a product that’s tailored to the specific requirements of Impact investors. We’ll continue to double down to make sure these clients have everything they need, as well as building new tools to help more investors mobilise billions and become sustainability leaders.
Increasing the automation of our platform
We deliberately combine AI and human intelligence in our platform. Our AI is trained by the next generation of analysts and engineers, so we can deliver the speed of technology alongside the nuance and quality that an evolving, complex topic like sustainability requires. We achieved 50% automation in seed, and will be accelerating that in the year ahead.
In short, it’s an exciting time for Net Purpose. We have ambitious goals: we want to put Net Purpose into the hands of all investors by 2025, and this fundraise is an important step towards making that happen.
If you’d like to learn more about our journey and the fundraise, read our this Tech Crunch article.