Swedish climate fintech startup Doconomy raises $36.9M in Series B funding co-led by UBS and CommerzVentures

Doconomy, a Swedish climate-focused fintech startup, has raised €34 million ($36.9 million) in funding from leading European banks, including UBS and CommerzVentures, the venture arm of Commerzbank. The Series B financing round was co-led by UBS Next and CommerzVentures, with additional participation from existing investors Motive Ventures, PostFinance, and Tenity.

The funding announcement comes as Doconomy continues to face criticism from climate skeptics. Despite these challenges, the startup, which helps bank customers measure the carbon footprint of their everyday spending, has seen exponential growth, especially with increasing demand for its carbon tracking tools.

The startup plans to use the fresh capital infusion to expand into North America and introduce new products. CEO and co-founder Mathias Wikstrom told CNBC the company’s mission is to enable banks worldwide to engage their clients in environmental, social, and governance (ESG) initiatives.

“Going forward, we want to enable every bank in every corner of the world to engage their clients in the ESG [environmental, social, and governance] work of the bank,” Wikstrom told CNBC. “We see a connection between the E and S, the environmental and the social. We can’t isolate those two different streams.”

Founded in 2018, Doconomy partners with major entities including Boston Consulting Group, Mastercard, S&P Global, and the United Nations Framework Convention on Climate Change to assess the climate impact of financial transactions. The company offers tools such as an app that calculates users’ carbon footprints based on their purchases, encouraging behavior changes to reduce negative environmental impacts.

One of Doconomy’s key offerings is the Åland Index, a methodology that “provides customers with a set of solutions for calculating consumption carbon footprints regardless of transportation, food, entertainment consumption.” Used by over 100 financial institutions across more than 40 countries, the Åland Index is a cloud-based service that helps banks convert every transaction into its corresponding CO2 footprint.

In addition to the funding news, S&P Global has joined Doconomy’s board of directors as a new investor, further strengthening the company’s position in the financial and analytics sectors.

Doconomy’s latest funding follows its February 2023 acquisition of Dreams Technology, a platform that leverages behavioral science to enhance digital engagement and financial well-being for customers. Despite facing online attacks from climate skeptics like right-wing commentator Jordan Peterson, Wikstrom remains optimistic about the company’s mission and partnerships.

Peterson recently criticized Doconomy on social media, calling it the “soft positive planet-saving voice of the worst imaginable corporate/fascist/green tyranny.” Wikstrom responded by highlighting the need for education to counteract such skepticism. “Fear leads to frustration, and frustration can lead to protests and violence,” he told CNBC. He hoped that continued criticism from skeptics like Peterson would eventually lose its impact.

Reflecting on recent global climate events, Wikstrom said, “We have floods, fires, so many concerns now. It’s not really hurricane season anymore; it’s fear season.”

Climate fintech, a niche within financial technology, is gaining increased attention from investors as governments worldwide push for corporate adherence to ESG targets and reductions in carbon emissions. Doconomy’s recent funding and strategic partnerships highlight the growing importance of this sector in the global effort to combat climate change.

We previously covered Doconomy in 2020 when the startup partnered with Giesecke+Devrient (G+D) to promote a greener payment lifestyle through sustainable fintech solutions.