Axios Pro: Climate Deals

September 13, 2022

Axios Pro Exclusive Content

🎯 And just like that, the summer funding slump is officially over. We're full to the brim on financing news today, so let's get right to it.

1 big thing: a16z, Coatue place carbon software bet

Illustration of a dollar bill that reads "CO2" and has an earth in the middle
Illustration: Sarah Grillo/Axios

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

Why it matters: The involvement of heavy hitters a16z and Coatue in the round show 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.

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