Plenty of major corporations have announced net-zero emissions targets. And while that alone won’t be enough to move the needle on climate change — for that, we’ll need trillions in investment coupled with government action — these targets have gotten the ball rolling.

What’s more, those net-zero goals are trickling down, influencing companies throughout the supply chain, the sources of so-called Scope 3 emissions, to do the same.

“If you’re in somebody’s Scope 3, and this company has made some hard commitments, they’re going to put pressure on you,” Alexis Normand, co-founder and CEO of Greenly, told TechCrunch. “For a lot of mid-market companies or SMBs, if you’re not able to be part of that bigger company’s reduction strategy, you’re essentially locked out of procurement.”

For well-capitalized companies, tracking carbon emissions throughout their operations often involves a dedicated team. Smaller companies, though, may not have the headcount for that. Those are the companies Greenly has targeted. “We have built business on helping these SMBs and mid-market companies cope with those new obligations at a lower price,” Normand said.

Greenly’s main product is carbon accounting software, which pulls in customer data, including utility data, freight bills, cloud computing usage, and financial records. It takes that information and, coupled with its own data and algorithms, calculates carbon emissions by category and scope for customers.

The startup’s business has been growing at a reasonable clip. Greenly, a Paris-based company, was founded in 2019, and last year it recorded just over $10 million in annual recurring revenue. Normand hopes to double ARR annually for the next several years.

To help hit those targets, the company is looking to expand beyond company-level carbon accounting and into life cycle assessments for individual products. When undertaken manually, these assessments can take weeks to months to complete, requiring companies to tally their materials and energy usage along with that of their suppliers to arrive at a carbon footprint figure for a single item. Greenly is hoping its automation-heavy approach will help smaller companies tackle those assessments more quickly and comprehensively by drawing on its carbon accounting expertise.

“In some industries, it is more and more of a requirement. Like in the manufacturing space, you can’t sell to General Motors or Ford without giving the carbon footprint of every single spare part. In the garment industry and the construction industry, it’s becoming the same thing,” Normand said.

To fund those new initiatives, Greenly recently raised a $52 million Series B, TechCrunch has exclusively learned. The round was led by Fidelity International Strategic Ventures with participation by Benhamou Global Ventures, Energy Impact Partners, Hewlett Packard Enterprise, HSBC, Move Capital and XAnge. The company’s fundraising was well underway before the recent SEC rules were approved, and while the then-proposed regulations were not the main driving force behind the round, they were a “booster.”

The fact that the fundraise is a sizable Series B helps it stand out among climate tech companies, which tend to encounter hurdles after the early stages before growth equity can step in, the so-called missing middle.

That’s in part because Greenly is not a stereotypical hard-tech climate startup. It came into the round with an advantage: it’s applying SaaS to climate tech, and SaaS a business model that’s well understood.

“Nobody asked us different metrics than they would have expected from another SaaS company,” Normand said. “Investors were not nicer to us, because we were climate tech. They looked at things that everybody else looks at, like annual recurring revenue, retention and stickiness of the solution engagement, and so on.”

Greenly’s Series B isn’t necessarily a sign that it’s getting easier for climate tech startups to bridge the middle rounds. But it does suggest that venture investors are warming to climate tech more broadly, proving that there’s a market for businesses focused on sustainability. It’s a shift that may end up benefiting the entire sector.

Plenty of major corporations have announced net-zero emissions targets. And while that alone won’t be enough to move the needle on climate change — for that, we’ll need trillions in investment coupled with government action — these targets have gotten the ball rolling.

What’s more, those net-zero goals are trickling down, influencing companies throughout the supply chain, the sources of so-called Scope 3 emissions, to do the same.

“If you’re in somebody’s Scope 3, and this company has made some hard commitments, they’re going to put pressure on you,” Alexis Normand, co-founder and CEO of Greenly, told TechCrunch. “For a lot of mid-market companies or SMBs, if you’re not able to be part of that bigger company’s reduction strategy, you’re essentially locked out of procurement.”

For well-capitalized companies, tracking carbon emissions throughout their operations often involves a dedicated team. Smaller companies, though, may not have the headcount for that. Those are the companies Greenly has targeted. “We have built business on helping these SMBs and mid-market companies cope with those new obligations at a lower price,” Normand said.

Greenly’s main product is carbon accounting software, which pulls in customer data, including utility data, freight bills, cloud computing usage, and financial records. It takes that information and, coupled with its own data and algorithms, calculates carbon emissions by category and scope for customers.

The startup’s business has been growing at a reasonable clip. Greenly, a Paris-based company, was founded in 2019, and last year it recorded just over $10 million in annual recurring revenue. Normand hopes to double ARR annually for the next several years.

To help hit those targets, the company is looking to expand beyond company-level carbon accounting and into life cycle assessments for individual products. When undertaken manually, these assessments can take weeks to months to complete, requiring companies to tally their materials and energy usage along with that of their suppliers to arrive at a carbon footprint figure for a single item. Greenly is hoping its automation-heavy approach will help smaller companies tackle those assessments more quickly and comprehensively by drawing on its carbon accounting expertise.

“In some industries, it is more and more of a requirement. Like in the manufacturing space, you can’t sell to General Motors or Ford without giving the carbon footprint of every single spare part. In the garment industry and the construction industry, it’s becoming the same thing,” Normand said.

To fund those new initiatives, Greenly recently raised a $52 million Series B, TechCrunch has exclusively learned. The round was led by Fidelity International Strategic Ventures with participation by Benhamou Global Ventures, Energy Impact Partners, Hewlett Packard Enterprise, HSBC, Move Capital and XAnge. The company’s fundraising was well underway before the recent SEC rules were approved, and while the then-proposed regulations were not the main driving force behind the round, they were a “booster.”

The fact that the fundraise is a sizable Series B helps it stand out among climate tech companies, which tend to encounter hurdles after the early stages before growth equity can step in, the so-called missing middle.

That’s in part because Greenly is not a stereotypical hard-tech climate startup. It came into the round with an advantage: it’s applying SaaS to climate tech, and SaaS a business model that’s well understood.

“Nobody asked us different metrics than they would have expected from another SaaS company,” Normand said. “Investors were not nicer to us, because we were climate tech. They looked at things that everybody else looks at, like annual recurring revenue, retention and stickiness of the solution engagement, and so on.”

Greenly’s Series B isn’t necessarily a sign that it’s getting easier for climate tech startups to bridge the middle rounds. But it does suggest that venture investors are warming to climate tech more broadly, proving that there’s a market for businesses focused on sustainability. It’s a shift that may end up benefiting the entire sector.