Montréal-based environmental, social, and governance (ESG) software startup Novisto has closed a $9.6 million CAD ($8 million USD) Series A round of funding, which brings the company’s total funding to date to $11.4 million CAD.
“Corporate ESG reporting and management is now essential for investors and other important stakeholders.”
The round was led by White Star Capital with participation from Diagram Ventures, which helped Novisto launch last year. The proceeds from this Series A round will allow Novisto to triple the size of its engineering and product teams, scale its product roadmap, and expand beyond the North American market into Europe.
ESG refers to the key factors associated with measuring the sustainability and societal impact of an investment in a business. Some businesses, including larger enterprises, use ESG criteria to better determine their future financial performance.
Novisto represents one of several startups looking to innovate ESG in Canada. The startup offers enterprise software for corporate sustainability management aimed to help companies create value from their ESG strategy, data, and reporting. Novisto’s platform allows users to quickly accelerate sustainability initiatives and goals into their corporate strategy and stay informed on changing regulations related to ESG.
Novisto was founded in 2019 by CEO Charles Assaf, CTO Marian Borca, and chief product officer Edouard Clement. After being incubated by Diagram Ventures, the startup raised a $1.8 million CAD seed round from the Montréal-based investor last year. Diagram Ventures recently secured $60 million for an “opportunity fund” aimed to accelerate the traction of the most promising companies in its existing portfolio.
Novisto claims its offering has gained significant traction since 2019. The startup’s customers include CAE, TMX Group, and most recently, JetBlue Airways.
“We look forward to utilizing the Novisto software to help us maximize our ESG performance and generate long-term value within the travel industry,” said Sara Bogdan, director and head of sustainability and ESG at JetBlue Airways. “We are focused on a lower-carbon future and achieving net-zero carbon emissions for our operations by 2040 and feel Novisto will help us plan, measure, and ultimately achieve our ambitious goals in this area.”
The COVID-19 pandemic highlighted a number of far-reaching societal challenges, which has led ESG to emerge as an important area of investment for businesses around the world. The results from a July poll issued by JP Morgan highlighted that business leaders feel the pandemic could be considered a long-term catalyst for ESG investing.
In Canada, several startups have looked to help innovate ESG from a technology perspective. One of the most notable companies in this area is Calgary-based Benevity. In December, British private equity investor Hg acquired a controlling stake in Benevity, reportedly bringing the company’s valuation to over $1 billion USD.
“Corporate ESG reporting and management is now essential for investors and other important stakeholders,” said Assaf. “This Series A investment and partnership with White Star will enable us to unlock the next level of our vision to become the world’s leading software solution for integrated ESG data, management, and reporting.”
Image source Diagram Ventures.