a16z, Coatue place carbon software bet on Patch

Patch, a carbon market software startup, has raised $55 million in Series B funding from Andreessen Horowitz, Energize Ventures, and Coatue, the company tells Axios.

Why it matters: The involvement of heavy hitters a16z and Coatue in the round shows the level of interest in the carbon software space, as parts of the climate tech industry move from asset-heavy hardware plays to the more VC-friendly SaaS model.

Details: Energize led the all-equity round. Tyler Lancaster, an Energize partner, will join Coatue general partner Caryn Marooney on Patch's board. The company's valuation was not disclosed.

How it works: Patch makes infrastructure software. The software is built so that different groups in the carbon market can assemble data in one place.

• Patch CEO Brennan Spellacy likens Patch to a layer underpinning the carbon markets, similar to second-generation fintech companies that power online transactions between an e-commerce company and a customer.
• Patch generates subscription revenue from the companies it integrates with, and it also has a take rate on each transaction completed using its software.
• Spellacy, a former Shopify engineer, says Patch has 150 customers, including private equity giant EQT. Roughly 40% of those customers are in Europe.