As climate change grows into a serious global concern, most businesses are doing their best to avoid becoming a contributing factor. Achieving net-zero emissions, reducing dependence on fossil fuel, and switching to green energy, is a complicated and multistage task that requires expertise in climate management and regulations around it among other things.
For this reason, climate tech companies like Persefoni have come into the spotlight for being a capable replacement of all traditional climate management services needed by large-scale climate-conscious businesses around the world. The Persefoni platform allows companies to keep a track of a business’s total emissions by incorporating everything from electricity bills to plane journeys efficiently. This way organizations can lower their carbon footprint without affecting their financial performance. The Tempe, Arizona-based company aims to offer the same capabilities to manage carbon footprint in an establishment that is often used to manage corporate financial transactions.
“Ultimately, we want to make measuring and tracking every organization’s carbon footprint as ubiquitous as managing their financial performance,” said Kentaro Kawamori, CEO and co-founder of Persefoni.
Recently this carbon management and accounting tech startup closed a successful Series B funding round with participants like The Rise Fund, Stephen Ellis, The Ferrante Group, Domenic Ferrante, and Sumitomo Mitsui Banking Corporation. Here is how they got there.
Kentaro Kawamori, Jason Offerman, Kim Stroh, and their ClimateTech Startup
Persefoni is the brainchild of three co-founders Kentaro Kawamori, Jason Offerman, and Kim Stroh. Kawamori is a Forbes 30 Under 30 honoree known to be the youngest ever Chief Digital Officer of a Fortune 500 company, Chesapeake Energy. He was born in Japan then moved to Germany when he was only 2 years old. Spending 11 years in Germany, Kawamori’s Japanese father and German mother decided to shift to the U.S.
Kentaro Kawamori went on to complete a Bachelor’s degree in Arts/Science from Northern Arizona University and then acquired a Master of Business Administration degree from Arizona State University. Having a tech-centric mindset, the first job Kawamori secured was at Accenture as a Cloud Strategy Consultant. During his time in Accenture, Kawamori became interested in being a Venture Partner focused on early-stage SaaS companies.
At the age of 27, Kawamori joined Chesapeake Energy, a publicly-traded Fortune 500 company, and worked there as the Chief Digital Officer. At Chesapeake Energy, Kawamori came across Jason Offerman who later became the co-founder of Kentaro Kawamori’s brainchild, Persefoni. Offerman has expertise in deep operational, strategy, engineering, material experience in ERP solutions and implementations.While working for Chesapeake Energy, Kawamori acquired experience in supervising full digital product development cycles with an inclination towards enterprise technological support and innovative technology models. Kawamori and Offerman are now partners at Rice Investment Group, a multi-strategy fund focusing on the energy sector.
While working at Chesapeake Energy, Kawamori realized that there was a rush in ESG investing. He noticed how desperately responsible investment funds, consumers, governments, and investors were asking businesses to manage and minimize their carbon footprint accurately. The responsibility to become fully climate-conscious demanded a huge commitment from organizations to keep sustainability factors in check.
Kawamori believes that if only people could get to the bottom of the problem then they would understand that in reality, calculating a carbon footprint and understanding what the performances in the first place are following age-old procedures and the worst thing about it is that there is no software available which can effectively measure these significant metrics.
Kentaro Kawamori said, ‘‘The idea came about because, after talking to other CEOs and friends in business, we realized there was a huge opportunity for a single, usable software solution,” he said. “At the moment, you basically have to pay external consultants a whole lot of money to come in and measure everything.”
Offerman, who is now the COO of Persefoni, was naturally drawn to Kawamori’s idea of a tech-based platform that creates an AI platform for climate management and carbon accounting for business organizations. Both of them started working together on creating the product between February and July of 2020. Along the way, the duo reached out to Kim Stroh, the third co-founder of Persefoni.
CEO of Persefoni said, “We obviously had an advantage in that there was a pre-established relationship with our lead investor,” he added. “But we were really happy to be able to bring on more even as the pandemic wore on.”
The current CPO of Persefoni, Stroh is a computer scientist and mathematician. Stroh has always been a builder who oversees from development to architecture of various software-centric solutions. When Kawamori pitched the idea behind the first climate-tech SaaS startup, Stroh decided it was time to make the most of the opportunity to make a lasting change in climate change and joined the startup.
CPO and co-founder of Persefoni, Kim Stroh said, “When Kentaro presented the vision of a SaaS company delivering business value and making a positive impact to the earth, I was instantly sold.’’
During the early phase, the three co-founders learned just how broad and intricate the topic of carbon accounting really is. But it helped them work with companies active in different industries and belonging to various sectors. To achieve this, the team had to accomplish a lot of foundational work starting from product development, to education, and research. Stroh believes that as ClimateTech is still in an early phase and going through rapid changes, there is more room for Persefoni to grow and innovate.
Kim Stroh said, “When we started Persefoni, no one could have predicted the wave of regulatory changes now happening in ClimateTech. If I had a crystal ball, I’d pay earlier attention to the regulatory changes being proposed and continue to work closely with our customers to help them understand the potential impact and prioritize the development of Persefoni’s features.
The Persefoni Platform
Persefoni is a specialized ClimateTech startup that offers an enterprise platform that helps businesses better calculate and minimize carbon footprint using artificial intelligence and real-time analytical data. Persefoni service can help large-scale companies to regulate their carbon emissions systematically and help the global environment.
“Persefoni is 100% compliant with the Greenhouse Gas Protocol and Partnership for Carbon Accounting Financials frameworks.”- Persefoni Website.
Their Enterprise Carbon Footprint score can measure carbon emissions from an organization with respect to their company size. Other products and services of Persefoni includes the following;
- Carbon Accounting
This service helps organizations to create a comprehensive greenhouse inventory by tracking and measuring accurate levels of carbon emissions. There is no requirement for clients to have the technical knowledge to benefit from Persefoni products and services. The best thing about the greenhouse inventories thus created are 100% compliant with the Greenhouse Gas Protocol.
Kawamori said, “We cracked the code on taking the best from the financial ledger technology, where the accounting process is completely automated, so we don’t do any services. We’ve got a pretty significant channel strategy mirroring very similar to what you might have seen from UiPath in the early days where the primary route to market was through big four and significant consulting partners.”
- Sustainability Reporting & Disclosures
All significant sustainability reporting workflows like TCFD, SASB, and GRI abide by the Greenhouse Gas Protocol. Through this service, companies associated with Persefoni and relying on its expertise can connect their carbon footprint data easily with sustainability reporting workflows seamlessly. It allows companies to focus on what matters most for them while Persefoni’s experienced team and intelligent platform can handle Sustainability Reporting & Disclosures.
- Climate Scenario Modeling
This is an ideal route created using the Science-Based Targets Initiative’s (SBTi) Temperature Scoring Method which was developed in collaboration with CDP and WWF. It shows any financial and corporate structure what should be the goals for achieving 1.5C or even 2C scenarios as per the Paris Agreement. Climate Scenario Modeling also helps companies understand the true meaning of reaching net-zero.
Kim Stroh, co-founder of Persefoni says “The ClimateTech space is new and constantly evolving, and Persefoni is keeping right up to meet the needs of this growing and emerging space by listening closely to our customers.”
The Persefoni team is currently in a dynamic and constantly growing space where new developments are being made at a rapid pace. Kim Stroh, CPO, and co-founder of the startup said in an interview that their priority as of now is to pay close attention to regulatory changes and ClimateTech proposals so that Persefoni can offer customer-specific features via its platform.
‘‘Persefoni provides businesses with a Climate Management & Accounting Platform (CMAP)—the equivalent of enterprise resource planning software for climate—to set up the scope of their carbon reporting based on established guidelines and provide a window into a company’s emissions profile.’’- CEO of Persefoni, Kentaro Kawamori.
Delivering the roadmap strategy despite extreme and incessant market pressure is another challenge for Persefoni. For now, this early-stage venture is working on expansion across all verticals, partnering with similar entities to efficiently deliver the most value to solve business problems.
Competitors, Market Growth, Investors, and Partners
According to a recent study, the market size of carbon accounting and carbon management systems (in North America alone) was worth $10.9 billion in the year 2020. This value is expected to grow to $19.8 billion in just about 5 years. Experts say that the fastest-growing market for Persefoni is in the Asia-Pacific region where the carbon management software market is growing at 25%.
As for the UK, under rules which are to become mandatory in April 2022, more than 1300 large-scale companies, as well as financial institutions, will have to disclose climate-related data to the authorities. Regulators have been pressuring global tech companies to provide more accurate ESG (Environmental, Social, and Governance) data so that a proper framework can be constructed.
CEO of Persefoni, Kentaro Kawamori said, ‘‘By understanding the climate impact of their investments, the financial services industry will be able to align capital to sustainable business practices – funding the transition to a net-zero economy.’’
Persefoni is placed perfectly in its relevant market sector from where it can lead the revolution in ClimateTech. With its carbon accounting software-as-a-service, Persefoni could be catapulted to the forefront of the carbon management and reporting market. They offer a software platform that plugs into the existing systems and helps financial institutions, organizations, and governments to not only calculate ESG data but also run audits in a compliant way to counter environmental risk.
At the moment, Persefoni is having nearly $4.1 million in average annual revenue. The team consists of 100-110 employees joining from all over the world based on their talents and unique experiences. The headquarters of Persefoni is located in Tempe, Arizona within the Phoenix Metropolitan Area.
CEO of Persefoni, Kentaro Kawamori ‘‘Carbon and climate disclosures will be the biggest compliance market since the advent of Sarbanes Oxley and GDPR, but with even greater complexity.’’
Even though Persefoni’s market seems a bit unpopulated than others, the startup already has a few direct competitors who offer services that are quite different from Persefoni’s A.I-based software platform.
CarbonChain is another SaaS-based platform that competes with Persefoni on the same level. It is based in London, England, and provides carbon admission accounting as well as data analytics solutions for sectors like energy and mining. Adam Hearne, co-founder, and CEO started the company a year before Persefoni came into existence. In terms of funding, CarbonChain has only been through venture round raising just about $607,400.
- Sinai Technologies
Maria Carolina Fujihara-led decarbonization platform, Sinai Technologies also comes head to head with Persefoni. The San Francisco-based company was founded in 2017 and has been offering energy sector carbon management and value chain engagement solutions. With less than 100 employees in the company, Sinai Technologies managed to raise a total of $13.8 million from its seed and pre-seed funding rounds. Notable investors include Obvious Ventures and AFORE Capital.
Mauro Cozzi co-founded Emitwise, an AI platform that automated carbon tracking solutions for organizations of all kinds back in 2019. UK-based Emitwise functions as an independent renewable energy company. It successfully raised $6.6 million during its seed round in May this year with participants like True Ventures and ArcTern Ventures.
According to the press, on October 12, 2021, Persefoni announced a partnership with Patch, an API-first carbon removal marketplace helping businesses purchase carbon removal from individual projects by grams. The partnership is supposed to bring a new class of ClimateTech solutions to neutralize carbon emissions. In collaboration with Patch, Persefoni launched Zero-Commission Carbon Offset Marketplace for buying certified, long-term offsets.
- Bain & Co.
Recently, the carbon accounting startup struck a major corporate partnership deal with Bain & Co. the Boston-based company is a management consulting company that intends to use Persefoni’s services and platform to help their clients manage carbon emissions and become mindful of their carbon inventory. The ultimate goal of this strategic partnership is to minimize carbon footprint by understanding investors’ priorities and presenting them accurate carbon tracking.
Persefoni has also partnered with Sumitomo Mitsui Banking Corporation who is also a recurring investor in past funding rounds.
$114.2 Million and 3 Funding Rounds
Persefoni’s financial data puts it in a strong position and among other well-off competitors like Sinai Tech and Emitwise. By the end of October, the startup raised $101 million from reputed investors during its Series B funding round. The total funding amount raised by Persefoni since inception is around $114.2 million. Oddup’s in-depth research reveals that the benchmark valuation of Persefoni till November 1 is $705 million.
The last valuation after closing Series B was near $600 million while the post-money valuation is around $701 million. A total of 14 individual investors have engaged in Persefoni’s Seed, Series A, and Series B. Oddup analysis of several metrics that represent the overall health of a business and chances of success in its relevant sector, Persefoni gets a score of 65.41.
Seed - $3.5 Million
Persefoni announced seed rounding of funding in august 2020, eight months after entering the business front. In total, the company raised $3.5 million during this round led by Rice Investment Group. Other notable investors and partners include Carnite Ventures, Daniel J Rice who also became a board member of Persefoni.
Series A - $9.7 Million
The ClimateTech startup raised $9.7 million through a Series B round of funding announced in April this year. Rice Investment Group came out as the leading investor this time around with Sallyport investments and NGP Energy Technology Partner as other participants. By this time, private equity companies like TGP signed up for Persefoni services and NGP’s principal, Greg Lyons joined the board of directors of the company.
Series B - $101 Million
The Rise Fund led Persefoni’s Series B round that closed on October 28, 2021. A total of $101 million were raised during this successful funding round with the participation of 12 investors including new and existing partner investors like The Ferrante Group, New Valley Ventures, Prelude Ventures SMBC, Clearvision Ventures etc.
Future of Persefoni
According to recurring investors of the company, Persefoni is a high-growth entity worth investing in at a time when global regulators are enforcing carbon and climate disclosures in a compliant manner.
Kim Stroh, CPO Persefoni “I think we have the best opportunity in changing the way people work to no longer limit opportunities by location. We found during the last year many new ways to work, connect, and be impactful without being in the same room.”
Persefoni’s team which decides on the company's roadmap includes an experienced and globally renowned board of advisors like Robert G. Eccles who served as the founding chairman of the Sustainability Accounting Standards Board.
Kentaro Kawamori said, “The mounting pressure from investors and shareholders as well as from the regulatory side is driving the business community to take a meaningful stand against climate change.”
Partnership with SMBC has opened a path for Persefoni to expand into the Japanese market. The startup is already working on a free tier of its base carbon accounting platform for SMBs.
“Companies need to develop and deliver “investor-grade” information on their climate-related impacts and investments. Disclosures must be professionally audited and assured by a qualified third party without conflicts of interest.’’ CEO and co-founder of Persefoni, Kentaro Kawamor