Tracking scope 3 carbon emissions is a significant challenge for companies aiming for net zero. Scope 3 are emissions along a supply and value chain, which means they have to consider a large number of partners. Avarni automates much of the process and says it can reduce the amount of time spent on carbon reporting from months to minutes. The Sydney, Australia-based startup announced today that it has raised $3 million for its carbon management platform. The funding was led by deep tech venture capital firm Main Sequence, with returning investors Vulpes Ventures and Common Sense Ventures.
Avarni’s platform aggregates supply chain and spend data into one comprehensive dataset and uses that and AI to help customers report and predict their carbon footprint. Since its launch last year, Avarni has analyzed more than $100 billion in corporate spending data and 100 million metric tons of carbon dioxide equivalents across supply chains, from public and private markets. Her clients include consulting firms such as KPMG Australia and Point B, and solar power startup 5B.
Avarni was founded by CEO Tony Yammine, formerly a management consultant at KPMG Australia, CPO Misha Cajic, a former Atlassian product manager, and CTO Anuj Paudel, who was a cloud network engineer at Macquarie Telecom Group. Yammine told gotechbusiness.com that the team’s experience with their former employers gave them the opportunity to speak to hundreds of large companies about the challenges they faced tracking and reporting scope 3 emissions.
A CDP report shows that scope 3 emissions make up as much as 75% of total company emissions. But they are difficult to track because companies need to get emissions data from their supply chain, which is often incomplete or inconsistent and requires a lot of organization. Avarni is addressing that challenge by using its dataset to help identify emission hotspots in supply chains, and is able to do so regardless of the structure or taxonomy of input data, Yammine said.
KPMG Australia used Avarni to progressively map climate risks in its supply chain by asking its 20 largest suppliers, who account for 40% of total spending on goods and services on an annual basis, to provide carbon performance data. Point B, meanwhile, is working with Avarni to provide its customers with faster insight into greenhouse gas emissions.
The startup makes money by charging professional services and consulting firms a fixed fee every month based on licenses. Companies pay a fixed fee based on the amount of procurement data analyzed by Avarni. The company doesn’t price by supplier, Yammine said, because it doesn’t want to discourage forecasting emissions based on the size of a supply chain. It also recently introduced modular pricing that allows customers to pay based on the components they need, including research, benchmarking and carbon forecasting.
Most of Avarni’s competitors are in the US, including Persefoni, SINAL Technologies and Watershed. Yammine said it sets itself apart by using AI to accelerate the decarbonization process. “Carbon reporting companies claim to automate data, but it’s not possible to automate data if you don’t have AI technology and a comprehensive data set to begin with.”
The company will use the new funding to develop its platform. It will also hire more employees and open an office in the US
In a statement, Field Pickering, managing partner of Vulpes Ventures, said: “What Avarni has achieved over the past year has been phenomenal and they are on a strong trajectory despite a challenging economic environment. The team is rapidly building one of the largest corporate emissions datasets available. This is the information companies need to inform their decarbonization strategies – and Avarni is at the forefront of gathering this information quickly.”