From left to right: Johan Biehl, Creative Director and Co-Founder of Doconomy, and Mathias Wikström, CEO and Co-Founder.
Economy
Swedish climate-focused fintech startup Doconomy told CNBC on Thursday that it has raised €34 million ($36.9 million) from leading European banks, including… UPS and Commerz Ventures.
Doconomy, which offers tools to help banking clients measure the carbon footprint of their daily spending, has raised cash in a Series B funding round co-led by UBS Next and CommerzVentures, the investment arms of UBS and Commerzbankrespectively.
Financial data and analytics company Standard & Poor's Global The company joined as a new investor, while existing shareholders Motive Ventures, PostFinance and Tenity also participated.
Founded in Sweden in 2018, Doconomy works with companies such as Boston Consulting Group, Mastercard, S&P Global and the United Nations Framework Convention on Climate Change to calculate the climate cost associated with financial transactions.
Among the company's tools is AIand Index, a cloud service for banks that helps its clients convert each transaction into its corresponding CO2 footprint. The index is used by more than 100 financial institutions in more than 40 countries.
Doconomy plans to use the new funds to drive expansion in North America and roll out new products, CEO and co-founder Matthias Wikström told CNBC in an interview.
“Going forward, we want to enable every bank in every corner of the world to engage their customers in the bank’s environmental, social and governance work,” Wikström said. “We see a connection between East and South, environmental and social. We cannot isolate these two different trends.”
Wikström said he was “very happy” to see partnerships emerging with the likes of UBS and Commerzbank, describing it as “an alliance to win money and brains to get control of this issue”.
Climate politicization
Doconomy's latest financing comes on the heels of the company's February 2023 deal to acquire Dreams Technology, a platform that uses behavioral science to enhance customer digital engagement and financial well-being.
Wikstrom said Doconomy's valuation in its Series B round was unchanged from the price at which it raised money in its Series A, which saw the company raise money from the likes of City projects, MasterCard Credit Cardand the parent company IKEA Ingka.
Doconomy's growth story has not been without challenges. More recently, the company has faced attacks from right-wing online commentator Jordan Peterson and his followers.
It's not really hurricane season anymore, it's fear season.
Matthias Wikström
CEO of Doconomy
Last week, Peterson took aim at the company in a post on the social media platform
The Canadian psychologist, who gained internet fame by criticizing so-called political correctness, is one of the famous skeptics who has described climate change as the “idiot socialist's get-out-of-jail-free card.” He once described rising greenhouse gas emissions as a positive thing for making the planet “green in the drier areas.”
Climate scientists say this is misleading, because it does not take into account the negative effects of severe drought, wildfires and heat waves caused by global warming on plants and ecosystems.
Wickstrom told CNBC that the situation surrounding Peterson's attacks on his company “shows that we need to educate a lot of people.”
“Fear will lead to frustration, frustration will likely lead to protests, protests will lead to violence, and violence will lead to damage,” he told CNBC.
Wickstrom said he hopes that the longer the likes of Peterson and other climate skeptics continue to “beat the drum,” the more likely their sentiments will ultimately sound “empty.”
“Looking at what's happening in Hawaii, Canada, France, Spain, Greece — we have floods, we have fires, we have a lot of concerns right now,” he said. “It's not really hurricane season anymore, it's fear season.”
Climate fintech is a niche area of fintech that has attracted increasing interest from investors, as world governments put pressure on companies to meet ESG targets and reduce the carbon emissions associated with their operations.
Michael Baldinger, chief sustainability officer at UBS, said the bank's venture investment in Doconomy “underscores our focus on driving innovation to provide the actionable data and insights our clients need to make informed choices about their investments and create the change they want to see.”
Clarification: The headline of this story has been updated to clarify that CommerzVentures, the venture capital arm of Commerzbank, co-led Doconomy's €34 million fundraising campaign.
