European regulations are transforming ESG reporting from a “nice to have” to a “must have,” creating new momentum for start-ups such as Paris-based Apiday, which offers a platform to target private equity funds and blue-chip companies that need to track and pilot sustainability efforts.
Asset managers, particularly in Europe, are a prime target for Apiday. With the Sustainable Finance Disclosure Regulation (SFDR), it's not just impact funds that are closely monitoring sustainability metrics: all kinds of companies are now paying attention to ESG reporting.
This has created a different environment than when Apiday was founded in 2021, and a backlash against ESG. CEO Edouard Audi himself responded to Elon Musk's criticism of ESG ratings, agreeing that they have limitations. But his focus at Apiday is on using ESG for value creation, not just compliance.
The company just raised €10 million in a Series A funding round, which will help fuel Apiday's growth in a sector that includes well-funded competitors such as AlphaSense, Dataminr, and Sesamm, as well as FactSet-owned Truvalue Labs.
Like those companies, Apiday uses AI to save its customers time. But it also offers human expertise, as do traditional consultants. That combination of both gives it an edge over competitors old and new, CEO Edouard Audi said in an interview with TechCrunch.
Another differentiator is its expansion plans: With customers in 23 countries and 60% of its sales outside France, the company is looking to expand in Europe and plans to open offices in Germany and the UK. It also wants to improve its overall service offering, so it expects its headcount to grow from 40 to 70 over the next 12 months.
Audi also hopes that Apiday's latest funding round will boost the company's standing among asset managers.
Image credit: Apiday
Before co-founding Apiday with former investor Charles Morley, Audi co-founded ride-hailing company Recab, an experience that inspired Morley to move into the ESG space. Audi says Recab had strong ESG-related positions compared to its competitors, but a lack of metrics on these topics meant that this wasn't properly taken into account during the sale.
Again, the way investors approach ESG is different now. And on the corporate side, ESG reporting is about to be further promoted by the Corporate Sustainability Reporting Directive (CSRD). “The importance of ESG data will increase dramatically in the coming years,” said Stanislas Roth, a partner at Daphne who led the round.
Image credit: Apiday
But data is only the foundation; it's what you can do with it that matters. For example, Apiday is helping clients create a roadmap with about 350 actions they can take to improve their ESG practices after they're in compliance. Funds have already reached that stage, but Apiday expects companies to follow suit, and it will be interesting to see how quickly they do so.
Series A backers include AENU, Daphni, Galion.exe and SWEN Capital, as well as existing investors Speedinvest and Revent.