IntegrityNext raises $109M for a platform to audit supply chains for ESG compliance

The funding landscape remains very tough for technology startups, but there are still some pockets, and specific companies, driving a lot of interest among investors because they look like they’ll break through whatever current macroeconomic trends that are gripping the world.

Today, a startup out of Munich called IntegrityNext announced that it has raised its first-ever funding, an equity round of €100 million ($109 million), for a new twist on supply chain software: a platform that helps organizations with lots of suppliers automatically audit and monitor those companies for compliance with environmental and sustainability governance (ESG) rules, both those that companies set for themselves, as well as those coming from a growing body of regulation.

The funding is coming from a single investor, EQT Growth, and it will be used to continue building the breadth of the platform as well as the company’s go-to-market position. IntegrityNext has a growing number of customers — there are even a few would-be suppliers — across the U.S. and Europe, so the plan is to build more capabilities to meet that opportunity.

Those capabilities will stay in the area’s environmental and ethical labor commitments, and for now, there are no plans to loop in audits around, say, whether a supply chain implicates a company in the act of breaking embargoes on countries over political disputes or issues of national security.

The crux of the product is a platform that acts like a big data ingestion engine, sourcing information that is publicly available to help develop risk profiles for different markets and different companies, complemented by regular contact with businesses in the supply chain to supply details. All this is compiled into a database that then provides a warning system and audits for IntegrityNext’s customers to better understand what is going on in their supply chains.

What they do next is up to those customers, though: they can then use this to help either require their partners to change things, change the partners themselves, send in human auditors for deeper investigations, or I guess nothing at all. But ultimately, this is about building a way to manage what might be thousands of suppliers for some companies.

“You have to find an efficient way to manage that,” said Dominik Stein, a partner at EQT Growth. “You can’t go to every company and do every check yourself; it just doesn’t work.” (Stein’s joining an advisory board with this round.) From what I understand, a typical customer might pay $60,000/year for the service, but the figure could be significantly higher or lower depending on the size of the supply chain.

IntegrityNext, and this round, are part of a group of startups that have grown impressively over several years but flown under the radar. The startup has been profitable since 2004, and has been completely bootstrapped until now. On its own steam, it’s picked up a 200-strong list of enterprise customers, including Siemens Gamesa, Infineon and SwissRe, with a supply chain database that monitors close to 1 million suppliers across 190 countries.

According to CEO Martin Berr-Sorokin, who co-founded the company with Simon Jaehnig (CRO) and Nick Heine (COO), they decided to raise capital now to essentially strike while the iron is hot. The company had never taken outside funding, but it had no shortage of inbound interest, he said, and the state of the market and the fact that raising might not be as easy later swayed things.

“We wanted to have a strong partner for our next growth phase,” Berr-Sorokin said in an interview. “We were getting to the next phase, and we need support for hiring, extending our network, sales and marketing, and going into new markets in Europe and the U.S. We didn’t have to do it. It was an option, and we feel lucky to have done it.”

ESG is evolving rapidly as a market opportunity. On one hand, consumers, thanks in part to social media, have become significantly more aware of how a business’ supply chain might effectively paint that business with the tar of labor exploitation and poor environmental practices, and that is putting a lot of pressure on those businesses to do better. The businesses themselves, meanwhile, are at the end of the day run by humans. Some may be hard-nosed when it comes to getting business done at any cost, but a good number have a conscience and want to do right by that, not just for the sake of appearances.

On the other hand, there have been notable developments playing out in the regulatory realm that might make whatever “nice to have” that has swirled around ESG into more of a “must do.” In Germany, companies with more than 3,000 employees are required to provide audits and reporting to demonstrate their own ESG compliance — compliance set by regulators — lest they face fines and other penalties. That number is coming down in 2024 to 1,000 employees. In Europe, there is regulation in progress that will place similar requirements on EU companies, bringing down the number of employees even more, to 250.

And that opportunity is definitely one being spotted by others: Worldfavor and Prewave are also building platforms that automate the process of businesses auditing and monitoring suppliers. Others like Salesforce have started to put ESG supplier monitoring into their sustainability product sets, and a startup in France, Sesamm, is building AI tech to help companies with their sustainability commitments.

That’s not the whole story, though: there will be inevitable pushback on these regulations, and there is a big question mark over how all of this will play out in one of the biggest and most industrialized nations in the world, the U.S., where some legislators have floated the idea of not only staying away from any regulation of this kind, but even proactively discouraging developments on this front as counter to economic progress. Businesses are also not all on board.

“Yes, some companies complain, but others see it as a competitive advantage to be good in ESG,” said Berr-Sorokin. “Of course the regulatory regime helps us, but if it gets pushed back, we still have trends in our society and good corporate practices.”

IntegrityNext raises $109M for a platform to audit supply chains for ESG compliance by Ingrid Lunden originally published on TechCrunch

Risilience, a climate analytics and risk assessment platform for enterprises, raises $26M

Risilience, a SaaS-based analytics platform that helps companies assess their climate risk and plan their transition toward net-zero carbon emissions, has raised $26 million in a Series B round of funding.

Spun out of the University of Cambridge’s Centre for Risk Studies (CCRS) back in 2021, Risilience says it has already amassed a number of high-profile enterprise customers, including Nestlé, Maersk, EasyJet, Burberry and Tesco.

The raise comes as ESG (environmental, social, and [corporate] governance) startups across the spectrum have continued to raise cash throughout the downturn, with climate-focused companies in particular apparently faring well. According to data from Bloomberg, venture capital (VC) and private equity funding found its way into 539 deals in the third quarter of 2022, just fractionally lower than the 547 climate-related funding deals in the preceding three months.

Separately, PwC’s State of Climate Tech 2022 report found that more than a quarter of every VC dollar spent in 2022 was targeted at climate tech, totalling around $15-20 billion per quarter — a figure that’s roughly comparable with the previous year.

There is, of course, good reason why climate tech has perhaps been a little more resilient to economic headwinds than other sectors. The global climate catastrophe is somewhere near the top of the agenda in many political and business spheres, with pressure mounting on corporations to address their carbon emissions and do their bit to counter their impact on climate change. And capturing the right kind of data and generating insights is central to this.

“Organisations are struggling to understand and quantify how climate risk affects their business financially, and plan their way to net-zero,” Rislience CEO Dr. Andrew Coburn explained to TechCrunch. “As we move to a low-carbon economy, businesses are faced with near-term transition risks, such as regulatory change and climate-related litigation; and long-term physical risks, like the floods and weather events.”

Digital twins

Risilience, in a nutshell, promises to enable companies to “turn data into actionable insights,” and measure the (potential) impact of climate-related risks to their business. For example, the company has built “digital twin” technology that allows companies to connect their own internal systems and databases to visualize and “stress-test” the impact of myriad “risks,” which in addition to weather events may include growing regulations, litigation and even evolving customer sentiment.

By way of example, the U.S. Securities and Exchange Commission (SEC) has proposed new rules that would require companies to report on any risks to their business related to climate change when filing updates for investors.

“Large organisations face a lot of challenges when it comes to disclosing their impact on the environment,” Coburn explained to TechCrunch. “With the threat of greenwashing, and increasing pressure from investors, reporting needs to be highly accurate but, with increasing regulatory pressures on businesses to disclose this information, they need to act fast.”

Ultimately, Risilience is all about helping companies move toward lower-carbon operations while minimizing the impact on profitability, and at the same time allowing them to report accurately to all stakeholders.

“Another common problem is that net-zero pledges are made with no detailed plan for how to get there,” Coburn added. “Risilience provides the crucial insight required in forming this plan that updates based on the ever-changing landscape organisations are facing.”

Prior to now, Risilience had raised £6 million ($7.4 million) in a Series A round back in 2021, and with another $26 million in the bank, the company said that it will use the fresh cash injection to drive international growth with a particular focus on the U.S. market.

Risilience’s Series B round was led by Quantum Innovation Fund, with participation from IQ Capital and National Grid Partners. 

Risilience, a climate analytics and risk assessment platform for enterprises, raises $26M by Paul Sawers originally published on TechCrunch

Danish startup Kanpla wants to help canteens cut food waste

As much as 40% of all food produced each year goes nowhere near a human mouth, resulting in economic, environmental and social costs of an estimated $2.6 trillion.

While there are a multitude of social, cultural and even technological reasons for these staggering statistics, we’ve seen a slew of startups emerge with propositions on how to solve the food-waste problem. Last year, Choco hit the much-coveted unicorn status for software that digitizes the ordering, supply chain and communications processes for suppliers and restaurants. Elsewhere, there are companies serving AI-powered forecasting smarts to help retailers optimize their stock replenishment, while others have built marketplaces for selling surplus or imperfect produce. There’s even a company setting out to transform food waste into food containers.

Another fledgling startup called Kanpla, meanwhile, is focusing its efforts on cutting food waste in one very specific vertical: canteens.

Founded out of Denmark in 2019, Kanpla initially targeted school canteens, serving up software for parents to preorder food for their kids (children under the age of 13 are not allowed a debit card in Denmark), which gave schools a good idea of how much and what kinds of food to prepare. Today, the company targets all manner of canteens, with paying customers including shipping giant Maersk and Danish brewer Carlsberg, as well as industrial canteen providers such as Coor and Cheval Blanc, which serve more than 230 canteens across the Nordics.

In 2022, Kanpla said that its software was used in some 1,500 canteens, and it expects to triple that number this year as it expands into more European markets. In preparation for this growth, the company today announced it has raised €2.2 million ($2.4 million) in a seed round of funding.

How it works

There are two core elements to the Kanpla platform. For kitchens, Kanpla offers what it calls an “operating system” for managing their whole canteen from a PC or mobile device, including creating digital menus, support for different payment types, collecting and presenting sales data, and more. Through this, companies can understand which food sells best, allowing them to stock up on the right kinds of ingredients thereby minimizing produce that might otherwise go to waste.

On the “diner” side, users can access a mobile or web app for perusing menus and ordering food, meaning that their food can be waiting for them when they arrive in the canteen.

On top of that, the Kanpla platform has features specifically for addressing food waste.

For example, it enables kitchens and canteens to sell surplus food from their lunch or buffet menus as takeaways to guests. Through the admin dashboard, they simply list the amount of food available and the price, and a communication is sent to each Kanpla diner’s app.

And Kanpla also has a food-waste registration feature, currently in beta, which brings together data such as the number of people entering a canteen and the amount of food that’s wasted across categories (e.g. in production or uneaten buffet food). This requires kitchens to weigh the food before they throw it out.

Canteens only

Perhaps the most curious aspect of Kanpla’s offering is that it’s so narrowly focused on canteens, something that Kanpla CEO and co-founder Peter Bæch said was simply due to his own experiences.

“The idea to target the canteen industry came from our experience at our local canteens,” Bæch explained to TechCrunch. “We saw firsthand a canteen which threw out huge amounts of food at the end of the day. We thought about how we spent half of our lunch-break waiting in lines. These inconveniences led us to dive into the pains, finding an industry that was heavily behind on digitalization, with additional problems of forecasting, limited tools to manage guest relations and a high degree of manual work for print and billing. These insights became the beginning of our journey to digitalize this industry.”

While canteens undoubtedly share many of the pain points of other eating establishments, each come with their own unique problems and opportunities that require a different approach from a technology standpoint.

“Canteens differentiate from cafes and restaurants by having recurring guests, coming back day after day, giving them a unique potential to connect with their guests” Bæch continued. “Additionally, they have the added complexity and issues due to menus switching daily, and payments working often through hybrid approaches that may include card, invoice and salary deduction.”

Kanpla’s seed round was led by Netherlands-based VC HenQ, with participation from a handful of angel investors. The company said it will use its fresh cash injection to expand beyond its native Denmark and into the U.K., Norway and the Netherlands in 2023, with plans to extend its reach into the U.S. and other European markets the following year.

Denmark has spawned a number of sizeable tech companies through the years, such as expense management software provider Pleo, which hit a $4.7 billion valuation a year ago, while local neobank Lunar achieved a valuation north of $2 billion last year. And then there is, of course, Zendesk, which was bought out by a private equity firm for $10 billion back in June.

HenQ partner Jan Andriessen reckons that Kanpla can blaze a similar trail to Zendesk by cashing in on what initially seems like a niche vertical.

“At first, the canteen industry can seem obscure, but it’s a big market with huge potential,” Andriessen said in a statement. “Many B2B software products have blossomed in seemingly non-obvious markets. Zendesk, one of Denmark’s greatest tech businesses, was founded well before customer success software became a well-defined term. Kanpla can be the same, and that’s what makes them the type of B2B business we’re excited to support.”

Danish startup Kanpla wants to help canteens cut food waste by Paul Sawers originally published on TechCrunch