Illustration: Aïda Amer/Axios
Sustain.Life, an ESG-as-a-service software startup, raised $16 million in seed funding co-led by Tapestry Venture Capital and Sustain.Life co-founder Mike Hanrahan.
- Hanrahan previously co-founded Jet.com, an e-commerce startup that sold to Walmart for $3.3 billion.
Why it matters: It won't be long until consolidation comes for the ESG-as-a-service market, which is churning out startups as investors and entrepreneurs search for ways to enter climate tech.
Other round investors included Active Impact, Kompas, Agya Ventures and Seyen Capital. Hanrahan declined to disclose valuation.
How it works: Sustain.Life is going after small and midsize businesses just starting to think about ESG, with a lower base price and simpler offerings than some rivals.
- Its customers are able to designate ESG targets, input emissions data from smart meters or other sources, and design internal processes with Sustain.Life's software.
- "With the high-priced software consulting model there's risks of a few things," Hanrahan says, adding that a large portion of his client base is from the accounting and consulting markets. "It's great if that's what companies want to pay for, but we think it's hard to scale in the market in that space."
Quick take: The market can only support so many ESG software companies and it's not uncommon for professional services firms to acquire software companies that best suit their needs.