Net Purpose, the London-based provider of social and environmental performance data for sustainable investors, recently announced it has closed a £10 million Series A funding round led by ETF Partners.
Series A Funding Round
Last week, Net Purpose, a platform for sustainable investors, announced that it raised £10 million in a Series A funding round led by ETF Partners, and including new investors M-Tech Capital and Exceptional Ventures, as well as additional commitments from 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.
The Series A Round will be used to expand the Net Purpose team, expand its coverage, as well as enable the firm to launch new features that would help investors measure the actual sustainability of their investment portfolios.
Founded in 2019, Net Purpose tracks the social and environmental performance of companies based on factual reporting. This compares to most sustainable investors who currently rely on reported and estimated data, as well as proprietary ESG ratings which measures financial risk. At present, Net Purpose serves investors with close to $50 billion in sustainable assets under management.
Net Purpose has built a platform that provides investors with facts related to the social and environmental performance of more than 2,000 public companies. The company currently provides data across more than ten investable Sustainable Development Goal (SDG) themes, including climate, water, waste, gender, financial inclusion, healthcare, and other social themes. The platform is powered by a combination of AI and human intelligence, which has helped Net Purpose to collect highly accurate data.
Sam Duncan, Net Purpose Founder and CEO, explained the goal of the business, saying “In the race to achieve climate and other sustainable goals, the sophistication of sustainable and impact investing is rapidly advancing. Investors are demanding the facts on the social and environmental performance of their funds, just like they do financial return. We are proud to arm investors with trusted and transparent data, and we are honoured to power the most sophisticated investors in the world.”
Tomer Strikovsky, Partner at ETF Partners, explained their investment in Net Purpose, saying “We are great believers in the power of data to drive meaningful change. By utilising the Net Purpose datasets, investors can now drive the shift in capital allocation into impact and climate-friendly assets. Net Purpose has established the highest quality dataset in the market, and is a pioneer in new and increasingly urgent themes. We are looking forward to the road ahead.”
Our Take
Over the past few years, interest in sustainable investing has grown exponentially. According to the UN Principles for Responsible Investment, $120 trillion is currently committed to invest sustainably, with allocations growing at 22% year on year.
This trend has created significant investor demand for ESG research, data, and ratings – a development that has prompted an explosion in the number of new ESG data providers. However, this data principally measures the financial risk to companies surrounding environmental, social and governance developments.
Net Purpose has taken a fundamentally different approach to sustainability oriented data. The firm has leveraged AI to collect factual data on the performance of public companies in relation to meeting their key climate and other sustainability goals. The firm’s recent capital raise should help it expand its coverage of public companies, grow its product line, and market its dataset more broadly to sustainable investors.