Illustration: Allie Carl/Axios
YvesBlue, a startup that offers ESG-as-a-service for financial institutions, raised $5 million in seed funding, the company tells Axios exclusively.
Why it matters: As YvesBlue CEO Anna-Marie Wascher puts it, "the market for ESG tech has really blown up in the last year," but most of the funding remains sequestered in carbon accounting.
Driving the news: Illuminate Financial led the round, which also included Aflac Ventures, Tribeca Early Stage Partners, SixThirty, Day One Ventures and Walter Ventures.
- YvesBlue spun out of Wascher's former firm, Flat World Partners, in 2020.
How it works: YvesBlue's modular software is designed for portfolio managers working with family wealth offices, investment banks or other large financial institutions under pressure to analyze and report their ESG practices.
- Firms pay at least $20,000 per year to use the software, with additional modules running the cost up closer to $75,000 to $100,000. YvesBlue currently has around a dozen clients, Wascher tells Axios.
- Modules include data visualization for analysts to use for shareholder or regulatory reports.
- YvesBlue currently uses data for public companies only, but is working on a module that aggregates data on private companies, Wascher says.
Between the lines: YvesBlue isn't trying to be another data broker for ESG, Wascher says, given there are a multitude of companies and established groups like Moody's already staking a claim in that realm.
- It instead wants to aggregate the data and customize the analysis to fit the firm's initiatives, like weighting carbon emissions data or board diversity data differently depending on what the firm wants to prioritize.
The bottom line: Decreasing risk within a portfolio is generally encouraged for long-term investors like pension funds or wealth offices. Wascher, a former investment banker, wants to prove with YvesBlue that it's also the right thing to do for the planet and for returns.
- "It's exciting to see, after 15 years, [ESG] is the focal point of investment management. People kept telling me good luck with the nonprofit when I started YvesBlue, but the world has come a long way," Wascher says.