For companies aiming for net zero, tracking Scope 3 carbon emissions is a major challenge. Scope 3 corresponds to emissions along a supply and value chain, which means that they must account for a large number of partners. Avarni automates much of the process and claims it can cut carbon reporting time from months to minutes. The Sydney, Australia-based startup today announced that it has raised $3 million for its carbon management platform. The funding was led by high-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 data set, and it uses that and AI to help customers report and forecast their carbon footprint. Since its launch last year, Avarni has analyzed more than $100 billion of business spend data and 100 million tonnes of carbon dioxide equivalents across supply chains, public and private markets. His clients include consultancies like KPMG Australia and Point B, and solar energy 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 TechCrunch that the team’s experience with their former employers has given them the opportunity to speak to hundreds of companies about the challenges they faced in tracking and reporting Scope 3 emissions.
A CDP report shows that scope 3 emissions account for up to 75% of total company emissions. But they are difficult to track because companies need to obtain emissions data from their supply chain, which is often incomplete or inconsistent and requires a lot of organization. Avarni addresses this challenge by using its dataset to help identify emissions hotspots in supply chains, and is able to do so regardless of the structure or taxonomy of the input data, Yammine said. .
Avarni founders Misha Cajic, Tony Yammine and Anuj Paudel
KPMG Australia used Avarni to progressively map climate risk in its supply chain by asking its 20 largest suppliers, which account for 40% of total annualized spending on goods and services, to provide carbon performance data. Point B, meanwhile, is working with Avarni to provide its customers with faster insights into greenhouse gas emissions.
The startup monetizes by charging for professional services and consulting a monthly license-based fee. Companies pay a flat fee based on the amount of procurement data analyzed by Avarni. The company doesn’t set price per supplier, Yammine said, because it doesn’t want to discourage forecasting emissions based on the size of a supply chain. It also recently launched modular pricing that will allow customers to pay for the components they need, including research, benchmarking and carbon forecasting.
Most of Avarni’s competitors are in the United States and include Persefoni, SINAL Technologies and Watershed. Yammine said it differentiates itself 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 the AI technology and a comprehensive data set to start with.”
The company will use its new funding to develop its platform. It will also hire more employees and open an office in the United States.
In a statement, Vulpes Ventures Managing Partner Field Pickering said, “What Avarni has achieved over the past year has been phenomenal and they are on a solid path despite a challenging economic environment. The team is rapidly building one of the largest corporate emissions datasets available. This is the intelligence companies need to inform their decarbonization strategies – and Avarni is at the forefront of gathering this information quickly.
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