A Fundamental Rethink of Carbon Accounting: Our Investment in Forward Earth
Carbon accounting’s elephant in the room
It was, by many standards, not obvious to invest in a pre-seed carbon accounting startup in 2023. After a legion of carbon accounting platforms had been rolled out in the first climate-tech wave of the 2020’s, with some quickly reaching impressive scale, many investors called the entire carbon accounting category “done.”
And yet, the longer we spent talking to businesses trying to get a grip on their emissions, the clearer it became that the real value – from a data, business, and climate perspective – is actually in getting a handle on Scope 3 emissions. These emissions, which occur upstream in supply chains and downstream during product usage, are notoriously difficult to track yet represent on average 75% of a company’s overall greenhouse gas footprint. Put differently, it felt like the real value was still being left on the table.
In fairness, it’s easy to see why Scope 3 emissions have historically been so difficult to measure. Sprawling, global value chains mean any solution must attempt to serve a huge number of suppliers, often using different reporting or compliance platforms (or none at all), who require a flexible yet accurate way to estimate emissions of often obscure component parts or processes. Rinse and repeat across all suppliers to each product, and replicate this work for the countless products a given manufacturer may be producing in a year. Without a serious calculation engine and brilliant distribution strategy that ensures access to this extensive supplier base, it’s something of a Sisyphenean task.
You can therefore imagine our surprise and delight when we met a team with the unusual combination of the ambition and skillset to finally crack the supply chain emissions challenge in the summer of 2023.
Enter Forward Earth
Outside in, it’s clear why the founding team of Forward Earth is a perfect match for this problem (they were ex senior leaders at Planetly, one of the most important “next-gen” carbon accounting startups). But let me tell you what’s less visible about their unique fit to this problem:
CEO Micha brings the deep domain expertise of someone who spent years absorbing the woes of customers conveying their carbon accounting challenges. But he also has the uniquely flexible mind of a (fun-fact) seriously talented DJ who understood that the key to unlocking this challenge was in an “ecosystem approach” (think: layering sounds), embedding Forward Earth with scaled-up players already working across the supply chain.
CPO Peppe brings years of domain expertise in building a user-obsessed carbon product, but also the patience and humor to slowly unravel this kind of problem (a skillset undoubtedly honed by being an Italian living in Berlin).
And CTO Cari is a unique technical talent who has a grounding “been there, done that” air honed over many years of practical execution and leadership – plus the extraordinary grit to make it as a rare, trailblazing female CTO.
The team is killer, with a unique right to win built over years of grappling with the specific challenges of supply chain emissions, but also the grooved-in familiarity of a football team who intuitively know how and to whom to pass the ball.
With their unique past experience, the Forward Earth team presented a fundamentally different approach to all the other carbon accounting tools we had seen: to focus relentlessly on an AI-first, partnership-driven approach, in which they would embed in existing supply chain, compliance, and regulatory platforms rather than singularly pursue an enterprise sales, platform-based strategy. This approach offered quick scale and network effects, and was backed up by the powerful calculation engine they were building. Put together, it was finally the carbon accounting company in which we were excited to invest. And so, together with our good friends at SpeedInvest and Lucid, we were thrilled to invest in Forward Earth’s pre-seed round in the summer of 2023.
One year later…
Since then, the company has mercilessly capitalized on all of its unfair advantages, moving at an extraordinary pace to build a product that helps companies up and down the supply chain better understand and reduce emissions and remain compliant despite the quickly-evolving regulatory framework. The product’s AI-engine enables effortless calculations and reporting across product carbon footprints, corporate carbon footprints, CBAM compliance, and additional environmental KPIs. Finally, its users are getting much-needed visibility on their true emissions.
As a result, they’ve generated rapid traction since the pre-seed, closing several major partners in just the past months and preparing their launch in the US market. And so we were delighted, but not surprised, when the great team at Mosaic Ventures approached Forward Earth with an offer to accelerate their growth through an early seed round. We are so excited to continue supporting the team in this next stage, and can’t wait to watch Forward Earth unlock the next wave of carbon accountability.