CSIRO VC fund Main Sequence Ventures has continued its support carbon accounting software startup Avarni, leading a $2.5 million raise.
Supporting Main Sequence were Brisbane early-stage fund Sprint Ventures and Afterwork Ventures.
It’s the climate tech SaaS platform’s third raise since it was founded in 2021 and its second in less than 12 months, although smaller than its $3 million raise in December last year.
The 2022 capital boost led by Main Sequence, with support from existing backers Vulpes Ventures and Common Sense Ventures. Avarni eschews naming its capital rounds.
The company was cofounded by a former KPMG Australia management consultant and ex-Atlassian product manager and counts KPMG among its clients.
Avarni uses artificial intelligence (AI) to measure a company’s carbon emissions and then help them cut what are known as Scope 1, 2 and 3 emissions.
Scope 1 covers direct greenhouse emissions from sources controlled or owned by an organisation. Scope 2 are the indirect emissions from things such as electricity, heating and cooling, and broader energy use. Scope 3 emissions comes from suppliers and supply chains, so Scope 3 emissions reporting means organisations supplying goods or services to a major contractor will need to provide emissions data of their own.
Avarni aggregates raw supply-chain and spending data, to help customers understand their Scope 3 emissions and enable supplier engagement on carbon reduction strategies.
Sprint Ventures investment analyst Tristan Latcham said Avarni is different from similar emissions startups because its prime focus is on supplier mobilisation, running counter to the prevailing norm of automated emissions data management.
“Unlike competitors solely fixated on data automation, Avarni adopts a two-pronged strategy, also giving importance to involving and mobilising suppliers in the sustainability journey,” he said.
“This approach fills a gap in the market where others automate without actively engaging suppliers.”
Latcham said the impact of those emissions can account for between 65% and 95% of a company’s total carbon footprint.
“So, it’s crucial for companies to get suppliers actively involved, not just watching from the sidelines but playing an active part,” he said.
“Avarni doesn’t just talk about measuring emissions; they push suppliers to actively cut them down, creating a ripple effect that makes sustainability efforts more impactful.”