Carbonfact raises $15M Series A to help fashion automate environmental reporting

TL;DR

• The regulatory landscape has become difficult for apparel and footwear companies to navigate. To fulfill the new reporting requirements, data has to be manually verified and consolidated across the supply chain and business, which is error-prone and unscalable
• Carbonfact automates this tedious data collection and reporting process, addressing the industry's challenge of collecting accurate and primary data from multiple tiers of the supply chain.
• In the 18 months since its Seed round, Y Combinator-backed Carbonfact has onboarded 150+ apparel and footwear brands including Columbia, New Balance, and Carhartt.
• The Series A is led by existing investor Alven. Headline is joining as a new investor and also joins the board. Existing investor Y Combinator also participated.

 $15M Series A to help fashion automate environmental reporting

Paris, 30th April 2024 - Despite facing increased regulatory pressure, the fashion sector's emissions are growing instead of declining (Source: BOF).

Founded in 2021 with the mission to decarbonize fashion, Carbonfact’s automation software tackles this issue with tools to help fashion companies measure, reduce, and disclose their products’ emissions in line with upcoming regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD).

Marc Laurent, CEO and Co-founder says: After meeting with hundreds of textile brands and suppliers we realized that collecting data and reporting on all product and supply-chain information is a complex task that requires more comprehensive data management than spreadsheets allow. We believe that fashion brands should be able to measure and report on climate progress with limited manual work.” 

In the 18 months since its seed funding, Carbonfact has onboarded more than 150 customers, including leading apparel and footwear brands like Columbia, New Balance, and Carhartt. The company saw a surge in demand in Q1 this year, which speaks to the increased regulatory pressure on the textile sector to measure and disclose emissions.

Measuring carbon emissions in the fashion industry is a complex task. The regulatory landscape has become difficult to navigate due to constantly evolving standards, such as the EU's Product Environmental Footprint Category Rules (PEFCR), which require expert knowledge. To calculate the environmental impact of a single garment, more than 100 data points are required, including weight, origin, and energy usage during manufacturing. Fashion companies face a significant challenge in tracking emissions due to the intricate, multi-layered nature of their supply chains. Manually gathering and consolidating data across the outsourced manufacturing and own business is not only error-prone but also unsustainable as new laws increase reporting requirements.

Carbonfact stands out by automating this time and resource-intensive task, addressing the industry's challenge of collecting accurate and primary data from multiple supply chain tiers. The software connects to the company’s IT systems and cleans and analyzes the data to then identify gaps and anomalies. Carbonfact employs machine learning to systematically fill in any missing details and provide reliable footprint calculations, even when data is incomplete. On the live platform, brands can identify emission-intensive manufacturing processes, build reduction plans and export automatically created reports for annual carbon disclosure, aligning with multiple frameworks, and ensuring compliance with new laws and standards.

Today’s $15M Series A is led by European VC Alven (Sézane, Dataiku, Qonto), who already led Carbonfact’s Seed round in mid-2022 and joined by global VC firm Headline (Fetch, Segment, Mistral AI) who is also joining the board. The round also sees a follow-on investment from Y Combinator, whose 2021 batch the company was part of.

Carbonfact’s priorities over the next twelve months will focus on helping textile retailers and manufacturers measure and build plans to reduce their emissions in line with upcoming regulations and expanding global onboarding teams. Carbonfact recently launched a new suite of modeling tools that enable fashion brands to understand how changes in product design or supplier selection can affect carbon footprints before products are made. This allows them to focus on reducing emissions instead of offsetting them.

Aileen Lerch, Director of Sustainability at Allbirds, one of Carbonfact’s first customers says: "Carbonfact's product-level focus ensures we can both measure our carbon footprint and actively find ways to reduce it. Carbonfact has been instrumental in helping us model different scenarios and make informed decisions that align with our sustainability goals."

Bartosz Jakubowski, Partner at lead investor Alven, says: "We strongly believe the future is about vertical and product-centric Carbon Management Platforms, and we were impressed by the leadership position that Carbonfact has been able to take on the fashion industry”.

Jonathan Userovici, General Partner at Headline, says, “The fashion industry is worth $1,900B globally. It also emits some of the highest amounts of emissions for each dollar spent. Carbonfact is the only platform that offers a product deep enough to satisfy today’s increasingly complex supply chains. Carbonfact’s customers were the first ones to tell us about the incredible value the platform provides. Some of them were even able to access more attractive lending rates and sustainability incentives by being able to show real sustainability efforts.”

About Carbonfact

The only Carbon Management Software built for the apparel and footwear industry. With Carbonfact more than 150 brands and suppliers measure, report, and reduce their emissions without manual effort. Visit www.carbonfact.com to watch a demo and learn more.

About Alven

Alven is an early-stage venture capital firm with a unique instinct for allying ourselves with high potential category defining companies and guiding entrepreneurs from seed to growth.

With over $2 billion under management, we operate from Paris and London and have backed over 170 teams across Europe & US in the last 2 decades, including many success stories such as Stripe, Algolia, Dataiku, Qonto, Ankorstore, Datadog (Sqreen), Trainline (CaptainTrain), OpenClassrooms, Jobteaser, Sézane. Learn more at alven.co / @alvencap

About Headline

Headline is a venture capital firm that partners with fast-growing technology teams in every geography to make their success global. The firm invests from its Early Stage Funds in the US, Europe, Asia, and Latin America. Headline’s Growth Funds invests globally from Series B and beyond. The size and locations of these funds allow the firm to see local trends up close, meet winning founders, and lead rounds at every stage. Among the 300+ investments globally, Headline’s portfolio includes Raisin, Mistral AI, Sonos, AppFolio, Bumble, Fetch, Segment, and Yeahka. www.headline.com