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Doconomy Raises $37M Despite Climate Skeptics

Swedish climate fintech startup Doconomy announced on Thursday that it has secured €34 million from top European banks
May 31, 2024

In a significant stride for climate-focused fintech, Swedish startup Doconomy announced it has raised €34 million ($36.9 million) in a Series B funding round, drawing investments from leading European banks including UBS and CommerzVentures.

Founded in 2018, Doconomy offers innovative tools that enable bank customers to measure the carbon footprint of their daily spending. The recent financing round was co-led by UBS Next and CommerzVentures, the venture arms of UBS and Commerzbank, respectively. This round also saw participation from new investor S&P Global, alongside existing backers Motive Ventures, PostFinance, and Tenity.

Doconomy collaborates with high-profile partners such as Boston Consulting Group, Mastercard, S&P Global, and the United Nations Framework Convention on Climate Change. Their AIand Index, a cloud-based service, helps banks convert every transaction into its CO2 equivalent. This service is now utilized by over 100 financial institutions across more than 40 countries.

CEO and co-founder Mathias Wikstrom shared with CNBC that the fresh capital will fuel Doconomy's expansion into North America and support the rollout of new products. "We aim to empower banks globally to engage their clients in ESG [environmental, social, and governance] initiatives, connecting environmental and social aspects," Wikstrom explained. He expressed optimism about the burgeoning partnerships with UBS and Commerzbank, terming it an "alliance of intellect and capital to tackle climate challenges."

Doconomy’s latest funding news follows its February 2023 acquisition of Dreams Technology, a platform leveraging behavioral science to enhance customer digital engagement and financial well-being.

Despite its growth, Doconomy has faced its share of challenges. The company recently came under attack from right-wing commentator Jordan Peterson, who criticized Doconomy's environmental efforts on social media platform X. Wikstrom responded by emphasizing the need for education to combat misinformation and foster constructive dialogue on climate issues.

As climate fintech gains traction, investors are increasingly drawn to companies like Doconomy, which align with global efforts to meet ESG targets and curb carbon emissions. Michael Baldinger, chief sustainability officer at UBS, highlighted the importance of this investment, noting that it underscores UBS's commitment to fostering innovation and providing clients with actionable insights for informed investment decisions.

Doconomy's journey reflects a broader shift in the financial sector towards integrating sustainability into core operations. As the company navigates new markets and expands its product offerings, it remains at the forefront of the intersection between finance and environmental responsibility.

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