Meet sTARTUp Pitching 2024 winner Esgrid
Esgrid snapped up the syndicate investment of up to €200k by the Estonian Business Angels Network (EstBAN) at sTARTUp Pitching 2024 competition. We talked to Co-founder Ott Ilves about the company’s mission and what lies ahead for the team.
Esgrid was only founded in the Summer of last year. Can you give us a brief backstory of the company?
The earliest discussions about the different problems to solve go back about a year from today. Oksana and I were advising a different company and during that time, they started talking about different problems they’d seen in supply chains and sustainable finance.We held around 30 customer interviews to validate the problems, and it was actually after we had a problem validation meeting with Katrin – then the Head of Sustainability at Telia – that she decided to join the team. She saw the problem of collecting and organizing ESG data from suppliers and engaging them effectively, first-hand.
Jevgeni joined the team in the autumn of 2023 after a targeted search for a tech cofounder.
In the summer of 2023, we found our pilot customer – a large supermarket chain – with whom we developed the product over the autumn. We ended up launching in December 2023. Since launch, we onboarded 25 value chain companies, booked 20+ enterprise demos, and closed 2 new paying customers – Nordic Milk, a large dairy producer, and Specialist VC, a venture capital fund.
You are a provider of ESG data infrastructure for sustainable procurement and finance. Who are your target clients and what do you offer them?
Our customers are medium-sized companies everywhere in Europe – companies with significant revenues and many employees, but who don’t have large sustainability teams in-house and thus need smart tools to help them work effectively. Sustainability is a topic that’s often owned by either the finance, procurement or quality departments, so we see that the heads of those teams end up responsible.We help these companies easily collect ESG data from their value chains and manage its overall impact.
Most companies who collect ESG data from their suppliers currently spend tens of thousands of euros every year on this, hiring consultants and lawyers to build the required assessment forms, and spending hundreds of man-hours on collecting the data on Excel spreadsheets or Google Forms. Moreover, respondents are unable to answer the questions without helpful explanations and user support and don’t receive any feedback on their ESG impact nor guidance on improvement.
Ultimately, we automate most of this process – we take care of the regulatory analysis, assessment creation based on company sectors, data collection, and impact analysis, supporting respondents through the assessment and providing them with improvement areas. In short, we help these companies use data for managing their value chain ESG impact.
At the beginning of January, the Corporate Sustainability Reporting Directive entered into force in the EU. A broader set of large companies, as well as listed SMEs, are now required to report on sustainability. This seems like the perfect backwind for Esgrid?
Indeed, we sail in regulatory backwinds – 50,000 enterprises in the EU need to improve their ESG impact under new sustainability regulations. However, our goal and destination is to become the leading ESG data infrastructure for sustainable procurement and finance.This vision isn’t only about regulation. The core set of ESG data that all the businesses will need to create and measure is largely similar – regulation can and will drive the weights of the different data points. This means that we’re able to develop our infrastructure for global adoption, and regulation will simply be there to speed us up.
Essentially, we believe that in creating a Sustainability ID for each business through our assessments, which can easily be queried for each financing and procurement decision, we will help drive sustainable behavior through money – the viability of business relationships, and the access and price of credit.
What are the next steps for Esgrid? How will EstBAN’s syndicate investment help you towards your goals?
To conquer the world, of course – or at least make a start at it. The investment will help us to hire developers, sales, and product people for the team, so that can build out some key features from our product roadmap and begin expanding outside of Estonia. We aim to grow outside of the Baltics already this year.
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