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Background

The solution is to simplify climate reporting. The Company is making automated CO2-accounting accessible to all SMEs through an easily comprehensible online platform. Measuring, calculating and reporting on carbon footprints needs to be easy, fast and cheap for companies of all sizes and shapes if we are to reach the SDGs together.

Problem solving

In the business community, SMEs are considered the most vulnerable to the effects of climate change. Accounting for more than 95% of the registered firms and 60-70% of employment overall, the 400 million SMEs constitute the backbone of economies worldwide. They need to live up to increasingly rigorous climate legislation and growing customer requirements in order to future-proof their businesses. Large corporations are lining up to commit to carbon neutrality or even to going net zero. These ambitious commitments trickle down their value chains and require the subcontractors (SMEs) to account for their carbon footprint. Most SMEs want to get started, and all of them need to - but they lack the knowhow, resources and tools to do so.

The solution

The company is here to help SMEs get started - and keep going! We are giving them the tools they need to keep up with the increasing compliance and impact requirements, thus removing insecurities about adding sustainability to their business plan - while also helping them take care of the planet.

Customers

The company is strategically targeting the large segments that will need CO2-accounting tools as a license to operate while many competitors are servicing the more sustainability-prone segments. We furthermore utilize company specific data via already implemented IoT devices and public data where possible. This gives us data quality that fits into the GHG-protocol framework for supplier-based methods with activity data. Most of our tech-competitors rely solely on ESG or GHG protocol spend-based methods to calculate GHG Emission in Scope 1, 2 & 3 which provides more of an indication rather than the actual emission.

The market

The initial target market consists of 300.000 SMEs in Denmark while scaling to initially Scandinavia and then the rest of Europe (23 mil. SMEs) is planned to commence in 2023. Our beachhead ket is made up of 11.900 Danish and a total of 3 million European SMEs in the building and construction sector - but a new market segment of Commercial Real Estate (10.400 danish companies) has shown great promise during the last 2 months.

Management team

The company is a Danish impact startup made up of a team dedicated to ensuring a thriving planet for generations to come:

- CEO: Sustainability consulting and leadership background. Setting the company strategy and direction with expertise in sustainability, business development, leadership & administration.

- Head of Operations: Consulting and customer service background. Overseeing day-to-day administrative operational functions, sales, customer joy and company culture.

- Head of Engineering: former Senior Fullstack Engineer. Drives the technical vision, strategy, architecture, and implementation of the systems and APIs powering the companys’ platform.

- Head of Design: former Senior Lead Digital designer. Secures the constant integration of both research and creative based design practices in the DNA and development of the platform.

- Head of Product: Product Manager and team manager background. Oversees discovery and delivery of the product, managing its roadmap and securing alignment on the company's strategic goals and visions based on customer insights.

Finance

- 2019 - medio 2020 Bootstrapped for research and development €35.000

- Sep 2020 Company established and founders entered with €35.000

- Dec 2020 Lead investor (The Footprint Firm)

- March 2021 Pre-seed round lead by The Footprint Firm + investment from Innovationsfonden

- Seed round planned for dec 2021 at €5-7 mio. valuation lead by The Footprint Firm dialogs with international VCs is started

Questions for the panel

Sales & Marketing - SaaS - Go for General SME market or beachhead Market: Commercial Real Estate or Building and Construction?

Which market should we go for and how should we reach it? We have for 8 months focused on the building and construction sector - but the legislation has moved slower than anticipated thus not creating the push/pull effect we planned for. We have run a sales experiment for the last 2 month that indicates an interesting market in commercial real estate - a market completely new to the entire team. The new market has a strong indication for sales to building admin or energy consultants selling to the building admin. We are also receiving a lot of interest for more broad versions of our product - main financial based calculations for banks beyond banking products. This will allow fast scaling but make us vulnerable for competitor interference in the market.

Pricing strategy and structure

Price indications have shown that a price point of 15.000 dkk/ year offers a good value for clients that know what a consultant costs. If they don’t then they compare us with their bookkeeping system where we are double or triple the prices. Entering the market for commercial real estate would mean yet a new pricepoint structure - that market is priced upon square meters of the building. We currently have a service that is time heavy on our end for the setup of companies with new data providers - which would mean that our internally optimal price would be a heavy setup fee followed by low subscriptions. We could for the Commercial Real Estate market find inspiration in the building management system pricing - but we offer a service that is complex but seems simple in our software.

Strategic agreements with international data partners (utility-, GPS- and Waste data)

We are part of the MasterCard Lighthouse program Link here. They help facilitate client/partnerships with banks and financial institutes with a speed dating setup. We are this year's wildcard - by far the most early stage startup in the program. However, all the banks and financial institutes have selected us for potential pilots - which are highly unusual. They all want us to deliver CO2 and climate analysis for their risk and loan assessment of SME clients as a both analysis tool for them but also a beyond banking product they can resell to their SME clients. They recognize that our super detailed supplier-based GHG calculations would provide them the best analysis - but it isn't as fast scaling as they would like us to be with our current tech team size. Their proposal is that we change our product roadmap to do the following:

1.Integrate with http://alandindexsolutions.com to make a fast scalable calculation model for SMEs but with low quality calculations in order to serve the +25.000 SMEs per bank (Mastercard have millions of SME clients). We need to make the integration and display our calculations in good UX/UI for the SMEs to grasp. It demands dedicated developers for a couple of weeks and is easy to copy for competitors. (Margin of error in the Co2 calculation method is + 50% on emissions)

2.After onboard all the SMEs of a certain nationality the next step would be to integrate with national bookkeeping systems and develop a document read system that can read the product type and amount on an invoice. This will demand dedicated developers per integration and are more complex and time consuming for competitors. Most of the banks can help speed up the integration process nationally. (Margin of error in the CO2 calculations method is +25% on emissions)

3.After the national integrations then they propose that we make the national IoT, GPS and digital utility meter integrations that we are currently doing. The data is in sectors and data provider silos - it makes it time consuming to do both for us but also the data provider. This makes the data provider fairly loyal to us - Kamstrup one of the main meter providers in Europe have said that it would require an extremely good offer to integrate with a new service provider if they already have a partnership and integration with another provider that offers the same service. We are in luck that we are the first CO2 calculations service provider that they are integrating with. The time-consuming process makes our time to market slow but also makes it difficult for competitors to enter a market we already are present in.

Their proposal requires us to hire extra developers fast or change our entire product. The first part of their roadmap is not a good product in the long run - so dedicating our 1,5 developers (Head of engineering and Head of product) would undermine our current product and leave us vulnerable in the long run - but we are past the time where investors bet on a good idea and vision - they demand sales. So, would it in your view make most sense to take the bet on their roadmap and hope that we have time to play the long game of their roadmap proposal or should we try to find investors that believe in the vision?