February 28, 2023

A Note from Novata’s CEO on Series B Funding

Today we announced Novata has completed its Series B funding round, raising $30 million from a diverse and impactful group of investors. This is an important step for our company, and I want to share a few thoughts about what this means.

Microsoft has joined our consortium of investors 

As a public-benefit corporation, we believe the evolution to a more sustainable and inclusive form of economic activity requires actors from across national boundaries, industries, sectors, as well as for-profit and nonprofit players, to come together. The unique mix of investors that has united to support Novata underscores just this. From the leading intermediary in the private markets, Hamilton Lane, to the social justice pioneer that is the Ford Foundation, to the foremost financial data company in S&P Global, we now add the world’s largest software company, Microsoft, to our investor consortium.  

I have long admired Microsoft for many reasons: it has fundamentally improved the world’s productivity, continually re-invented itself, and in recent years, led the private sector in confronting the climate crisis. At a time when most of the world’s prominent companies are seeking to become carbon neutral over the next 20 years, Microsoft committed to be carbon negative by the end of this decade and “remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975.” At the same time, Microsoft announced it would launch a $1 billion Climate Innovation Fund (CIF) to accelerate carbon reduction, capture and removal. It is from Microsoft’s CIF that Novata has received funding. 

It is less than a year since Novata’s commercial launch and over 3,500 companies now have access to use our platform to track, analyze, and improve on their sustainability and ESG dynamics. Over the next year, we expect to scale this number dramatically. As we grow, Novata will become the ‘on-ramp’ for tens of thousands of companies to begin their carbon reduction journey. We look forward to partnering with Microsoft, Hamilton Lane, Ford Foundation, and S&P Global in a range of innovative ways to help these firms address what I believe is the most fundamental crisis humanity faces. 

Our clients and partners have invested in Novata

We are also incredibly proud that our Series B includes a range of our key clients and partners. Canson Capital Partners, Clearlake Capital, Hellman and Friedman, Kohlberg and Company, Lindsay Goldberg, and The Vistria Group all invested in this financing round. Importantly, all their funds came directly from their GP, their partners, and their charitable foundations. This is an extraordinary sign of authentic support from some of the world’s savviest investors and underscores their commitment to the ideals upon which Novata was founded.   

Our new funding will power us to a new level of impact 

I have often thought that private companies, which make up the majority of the world’s economic activity, are akin to the figures in the ancient allegory of Plato’s Cave. They exist largely in isolation from other private companies, and their owners and managers don’t have the visibility to understand how their activity compares to peers and more broadly, affects society. 

Novata changes this.

Thousands of the world’s fastest-growing companies are now using the Novata platform to track, analyze, and improve on their ESG dynamics. This means we can create highly accurate benchmarks that, for the first time, give private companies real insights into how they are doing across dozens of the material non-financial metrics that matter. Importantly, these benchmarks are created from real, self-reported data, not scraped or hypothesized figures from a third party.

Our new funding, and just as crucially the groups that stand behind Novata and with whom we partner, enable us to accelerate our trajectory of progress and help tens of thousands of companies get a handle on their ESG data over the coming few years. 

There is a well-known saying, “If you want to go fast, go alone. If you want to go far, go together.” 

At Novata, we want to go far — and we will, thanks to the inspiring consortium that has come together to support our work.