UBS backs climate change fintech startup Doconomy with $37 million

Swedish climate financial technology startup Doconomy told CNBC on Thursday that it has raised 34 million euros ($36.9 million) from major European banks. U.S. and CommerzVentures.

Doconomy, which offers tools to help banking customers measure the carbon footprint of their everyday spending, raised funds in a Series B funding round co-led by UBS Next, the venture arm of UBS, and Commerz Ventures. CommerzbankEach.

Financial Data and Analytics Company S&P Global joined as a new investor, along with existing shareholders Motive Ventures, PostFinance and Tenity.

Founded in Sweden in 2018, Doconomy works with the Boston Consulting Group, Mastercard, S&P Global, the United Nations Framework Convention on Climate Change and others to calculate the climate costs associated with financial transactions.

One of the company’s tools is the AIand Index, a cloud-based service for banks that helps clients convert every transaction into its corresponding CO2 emissions. The index is used by over 100 financial institutions in over 40 countries.

Doconomy plans to use the new funding to expand into North America and launch new products, CEO and co-founder Matthias Wikstrom said in an interview with CNBC.

“Going forward, we want to enable any bank around the world to engage their clients on ESG. [environmental, social, and governance] “We see the work of banks as a connection between E and S – environment and society. These are two different streams that cannot be separated,” Wikström said.

Wikstrom said he was “very pleased” about the emerging partnership with banks including UBS and Commerzbank, describing it as “an alliance that is bringing both money and brainpower together to get control of this problem.”

Doconomy’s latest funding news follows the company’s February 2023 deal to acquire Dreams Technology, a platform that uses behavioral science to increase customers’ digital engagement and financial well-being.

Wikstrom said Doconomy’s valuation in the Series B round remains unchanged from the price at which the company raised its Series A, which included funding from companies such as: City Venture, master Cardand Ingka, the parent company of IKEA.

Doconomy’s growth story hasn’t come without challenges. Recently, the company faced attacks from right-wing online pundit Jordan Peterson and his supporters.

Last week, Peterson targeted the company in a post on social media platform X, accusing it of being “a calm, positive voice for saving the planet, perpetrated by the worst corporate/fascist/environmental tyranny imaginable.”

The Canadian psychologist, who gained internet fame for his criticism of so-called “political correctness,” is a well-known skeptic of climate change, having described it as a “stupid socialist get-out-of-jail-free” card. He once framed increased greenhouse gas emissions as a positive for “greening the driest parts” of the planet.

Climate scientists say this is misleading and fails to take into account the damaging effects on plants and ecosystems of intensified droughts, wildfires and heat waves caused by global warming.

Wikstrom told CNBC that the situation surrounding Peterson’s attack on his company “shows that we need to educate a lot of people.”

“Fear will lead to frustration, frustration will lead to protests, protests will lead to violence, violence will lead to damage,” he told CNBC.

Wikstrom said he hopes that the longer Peterson and other climate change skeptics “keep making noise,” the more their views will ultimately sound “hollow.”

“When you look at what’s happening in Hawaii, Canada, France, Spain, Greece, there are floods, fires, so much concern,” he said. “It’s not hurricane season anymore, it’s fear season.”

Climate fintech is a niche area of ​​financial technology that is attracting growing investor interest as governments around the world pressure companies to meet ESG goals and reduce the carbon emissions associated with their operations.

UBS Chief Sustainability Officer Michael Baldinger said the bank’s venture investment in Doconomy “underscores our focus on driving innovation to give our clients the data and actionable insights they need to make informed investment choices and drive the change they want to see.”

Clarification: The headline of this story has been updated to clarify that Comerzbank’s venture investment arm, ComerzVentures, co-led Doconomy’s €34 million funding round.