Private sustainability data firm EcoVadis has achieved “unicorn” status, reaching a $1 billion valuation after fundraising, the company’s Co-Chief Executive Officer told Reuters.
Paris-based EcoVadis raised $500 million as companies are showing increasing interest in gauging environmental, social, and corporate governance (ESG) impact data. 95,000 businesses in 200 categories in 175 countries use EcoVadis’ ratings on ESG issues. The company delivers scorecards and evaluations that help businesses assess their efforts toward becoming more sustainable. These insights also help guide financing decisions made by banks and private investors who prioritize ESG goals.
“We do this for procurement, and we do this for the finance world as well, so that the private equity can monitor their investments for you,” explained Frederic Trinel, co-founder and co-CEO of EcoVadis. “They can select new targets based on ESG performance and, overall, the market is incentivized to improve on those subjects. That’s really what EcoVadis is after: to guide all companies towards sustainability.”
The equity financing is the largest ever for such a company, according to EcoVadis, which says it has raised a total of more than $725 million. Private equity firms Astorg, BeyondNetZero, GIC, and Princeville Capital led the financing.
Most of EcoVadis’ business is with small private companies that comprise the bulk of larger companies’ supply chains, which are regulated by the U.S. government. These bigger companies are coming under increased pressure to boost sustainability and meet climate goals.
"We see a tipping point in the market. Everything is really accelerating," said Trinel. "When we look at the numbers, this year EcoVadis will grow 50%, last year we grew 45%, the previous year 35%, and the one before 30%. So every year, we've been gaining five points of growth."
The funding will help grow the business in North America and Asia. It currently employs 1,300 people.