Dive Brief:
- Watershed, a sustainability software startup, announced Thursday it had secured $100 million during its Series C round of funding. The new financing was led by San Francisco-based investment firm Greenoaks and raises the company’s valuation to $1.8 billion.
- The startup — which helps companies measure, report and reduce their carbon footprint — said the funding will allow it to continue developing climate programs for clients and redouble its investments in Europe. Watershed’s software platform takes data directly from companies’ systems to create an “audit-ready” carbon footprint report and supports businesses in understanding their climate disclosure obligations.
- Watershed said it manages more than an estimated 479 million tons of carbon equivalent across its portfolio, up more than 10 times compared to the last year. The company’s current list of clients includes BlackRock, Carlyle, Bain Capital, Walmart, Paramount, Colgate-Palmolive, General Mills and others.
Dive Insight:
Watershed’s Series C funding also included financial contributions from existing investors including Kleiner Perkins, Sequoia Capital, Elad Gil, Emerson Collective, Galvanize Climate Solutions, Neo and others.
“Corporate climate action is accelerating,” Watershed co-founder Taylor Francis said in the release. “Companies of all sizes and sectors are making sustainability a board-level priority.”
Watershed’s funding comes amid an increased demand for corporate transparency and government-mandated climate disclosure rules, some of which go into effect this year. Neil Mehta, managing partner at Greenoaks, said carbon measurement and climate disclosures are “shifting quickly from optional to mandatory,” increasing the need for such sustainability assessment platforms.
The European Union’s Corporate Sustainable Reporting Directive requires companies to provide comprehensive and detailed disclosures regarding their sustainability efforts and impacts both EU and non-EU entities listed on any EU-regulated market. This means U.S. companies with EU subsidiaries will also have to comply with these disclosure requirements if they meet certain thresholds regarding asset, revenue and workforce figures.
The Securities and Exchange Commission also plans to release its long-awaited climate disclosure rule in April, requiring companies to disclose climate-related risks like scope 1, scope 2 and scope 3 emissions and their risk management practices. This rule is separate from state-level regulation introduced by states like California, which passed its own climate disclosure bills last year.
To expand its climate solution business, Watershed also acquired VitalMetrics — a carbon data company and creator of Comprehensive Environmental Data Archive, an emissions database — last year. The startup also launched Watershed Disclosures in 2023, a software product it said aids clients in sustainability reporting and enables customers to fund clean power and sustainable aviation fuel through the Watershed Marketplace.
