Iceberg Data Lab’s (IDL) meteoric growth has been given another boost.
The Paris-based ESG data start-up last week received a US$10 million cash injection in a series A funding round. The company, which uses artificial intelligence to power a data model that founder Matthieu Maurin boasts has “no data gaps”, received backing from investors including Beringea, AXA Investment Managers and French venture capital fund MAIF Avenir.
Maurin told ESG Insight that the new pool of capital, which was double that raised in a seeding round, would be used to fund IDL’s international expansion and to “invest in our technology”.
“IDL will expand its commercial setup to have customer support capacities in all of the main financial hubs,” Maurin said. That will include a presence in the UK.
Bridging the Voids
IDL has quickly established itself as a vendor-to-watch in the fast-changing European ESG data market. Since its formation in 2019 the company has signed big-hitters including HSBC, BNP Paribas and Euronext among its slate of 50-plus major financial institutional clients. It has also recently signed contracts with “Dutch and Swiss major financial institutions”, Maurin said.
Clients have been drawn to IDL’s data model, which is built on publicly available company-reported information and supplemented with IDL’s own estimates. Derived data is gradually replaced as hard information on each datapoint emerges.
The model comprehensively covers all sectors and IDL’s services are being used to guide institutions’ investments, climate impact and risk-management decisions as well as their biodiversity, net-zero and Paris alignment policies. Clients use the model also to compile indexes, calculate corporate carbon footprints and build portfolio exclusion filters.
Maurin confidently says that the model, which deploys generative AI to help clients mine insights from datapoints on the 4,000-plus companies that IDL monitors, has no holes in its coverage.
“We use a systematic model enabling us to bridge data gaps seen in reported data,” Maurin said.
Lead investor Beringea, a venture capital firm, said it sees IDL’s model as a means to help investors address a multitude of environmental regulatory obligations designed to address sustainability challenges, including mitigation of global warming and biodiversity loss.
“Iceberg Data Lab is unique in partnering granular environmental data with comprehensive, AI-enabled solutions in a scalable way,” Beringea UK investment manager Piotr Bukanski said in a statement. “This enables asset managers, asset owners and banks to comply with regulation, streamline reporting, launch new products including biodiversity-focused ETFs, and ultimately drive impact at scale.”
Negative Sentiment
IDL’s growth has come despite a growing anti-ESG lobby that has helped to stall sustainability reporting regulations in the US, and has contributed to the watering down of some rules in Europe. Maurin said IDL’s focus on Europe, where regulatory oversight of ESG investing remains comparatively strong, means that his business has not felt the impact of such negative sentiment.
“The political backlash is rather focused on the US, which is more a concern for American ESG data providers,” he said. “Any cautious and reasonable investor or lender should appraise the value at risk in its portfolio due to exposure to or dependency on climate risks/regulation and also those aimed at the most harmful products for the environment, such as pesticides and plastic.
“That is a part of their fiduciary duty and therefore separate from political mood,” he added.
Maurin said his company has also been immune from a shortage of ESG experts that has many companies worried that they’ll be unable to create the teams necessary to meet their ESG responsibilities. A recent study by the UK’s Financial Services Skills Commission (FSSC) and the Aldersgate Group concluded that an ESG skills gap within financial services would widen as demand for sustainable finance and regulatory compliance grew.
“We see many experienced personnel that have trained to move into our field of expertise,” Maurin said. “They are actually motivated in joining an impact-driven company, so we do not face the same shortage of data professionals.”
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