Banana did it.
Brian O'Kelly, who recently sold his previous startup, advertising platform AppNexus, to AT&T for $1.6 billion, is teaching a lecture through MIT as part of a year-long course on supply chain management during the pandemic. I was watching. “I saw this slide in a lecture about the carbon footprint of bananas. It blew my mind.”
At the time, Mr. O'Kelly was running a metals commodity trading platform he founded, focused on reducing carbon emissions from trading and transportation. “I wanted to do something in the real world, just like I wanted to have an impact in the real world,” he told TechCrunch. “The advertising felt temporary,” he said.After a while, it was handling about a quarter of the copper coming into the United States.
But during his course at MIT, O'Kelly realized that the majority of the carbon footprint of metals like copper and aluminum comes from the mining and smelting stages. “For all this optimization and all the great things we could do, we couldn't fundamentally change it.
“But I just had this light bulb and I thought, in the digital world, it’s the other way around.”
He sketched out what a platform for tracking carbon in digital advertising could look like. He was returning to the temporary world of advertising, albeit with a change of focus.
O'Kelly spun off the commodity business and founded Scope3 in 2021 with its core supply chain tracking technology. The pitch for the new business was that digital advertising as it exists today is economically and environmentally disruptive, taking up nearly a quarter of every dollar spent. According to a study by the National Association of Advertisers, programmatic ads are wasted. That money goes to intermediaries, scams, or ads that appear outside the scope of your browser window. Because it's a relatively new industry, “it's easy to lose money,” O'Kelly said.
By eradicating these issues, Scope3 provides customers with the ability to not only spend more money on ads that people actually see, but also reduce their carbon footprint because fewer ads consume less power for data entry. Tell your customers that they can also save money. To find that waste and identify how it causes carbon emissions, Scope3 collected data and built a model.
Then, earlier this year, O'Kelly went into the operating room for an unexpected heart surgery.
While he was recovering, he started diving into AI. “I finally had the time to understand AI,” he said. This technology is taking the advertising industry by storm, with companies looking to use it in digital advertising and other media.
“We've noticed that media and AI are intersecting. People are using AI to generate ads, people are using AI to generate web pages, and now even searches are becoming AI-generated. ,” O'Kelly said. “In fact, this is our business.”
As he started fleshing out the idea, he thought, “I can't be the only one thinking about this.” So he booked GV, one of Scope3's existing investors. “The real reason I talked to them was for more competitive intelligence,” he said.
During the conference, he said, he heard how founders were pitching AI companies and climate change technology companies, but few explored the intersections between the two.
The meeting led to Scope3's new funding round, with the company exclusively telling TechCrunch that GV led a $25 million round to help the startup expand into the AI space. Other investors also participated, including Aperiam Ventures, Craft Ventures, Room40 Ventures, Venrock, and Virgo Strategic Investments.
The company is still collecting data and building models for the AI part of the business, but O'Kelly suspects that selling to customers will be similar to the digital advertising side. “We expect there to be a lot of alignment between the economic costs and the environmental costs,” he said.