What’s getting funded in climate tech: Managing ESG data, supplying fusion startups and removing carbon

Despite hints of a slowdown, investors still appear to be enamored with the climate tech world. Just ask those of us who cover the sector here at TechCrunch+: Our inboxes are constantly being bombarded with funding announcements. Here’s a quick rundown of three that caught our attention.

ESG data management startup Novisto logs $20M Series B

Executives might be backing away from their companies’ ESG commitments, and conservatives might be agitating for a backlash, but a new funding round suggests that the principles are far from disappearing.

“The backlash we’ve seen is a symptom of ESG and sustainability in general having gone mainstream,” said Charles Assaf, co-founder and CEO of Novisto, an ESG data management startup.

As if to underline the point, Novisto is announcing a $20 million Series B round Wednesday, TechCrunch+ has exclusively learned. The round was led by Inovia Capital with participation from Portage, SCOR Ventures and existing investors White Star Capital and Diagram Ventures.

The company was founded in 2019 on the belief that companies will eventually develop ESG tech stacks, Assaf said, “and ESG data management will be a core piece of that.” Novisto has already landed a few major clients, including workflow management company Asana, financial services group Manulife and pharma giant Sanofi.

ESG data presents companies with a range of challenges. While some is structured, much of it is not, and it runs the gamut from easily crunchable numbers to more narrative-style qualitative data. Companies are finding that they need ESG-specific solutions for complying with regulations, producing reports and preparing for audits. The field, which is still relatively new, is changing rapidly, meaning that companies have to ensure their ESG practices remain up to date.

But one of the biggest challenges Novisto’s customers have faced, Assaf said, was creating the tools and frameworks to identify and collect the data. “Companies are missing the right processes, the right system, the right governance of data,” he said. The startup hopes that by giving companies the right boxes to fill, they’ll start seeking out the data they need to give ESG-hungry investors the information they’re demanding.

Kyoto Fusioneering nets $79M Series C to make parts for fusion startups

Commercial fusion power has never felt closer. It’s not going to happen next year or the year after, but plenty of investors think it’ll be sooner than later. Even Microsoft has placed a bet, inking a deal with Helion that requires the startup to bring a plant online by 2028.

There are at least half a dozen other companies vying with Helion to supply fusion power to the grid. Many of them are developing a significant fraction of their technology in house, but Kyoto Fusioneering is betting that there’s plenty of stuff that plasma-focused startups would rather not think about.

Last week, the company announced that it had closed an oversubscribed $79 million Series C round, which was led by JIC Venture Growth Investments. The firm was joined by more than a dozen other investors, including JAFCO Group, Mitsubishi Corporation, Coral Capital and J-Power.

The Japanese company is concentrating on basically everything outside the fusion reactor itself, including plasma preheaters and heat exchangers that do the dirty work of turning the immense heat generated by fusing atoms into usable power. It’s a long bet, and ultimately success is outside the company’s control. After all, if no one is able to successfully harness fusion in a way that’s profitable on a commercial scale, they won’t have anyone to sell to. But given the sheer number of legitimate fusion startups, the odds appear to be tilting in Kyoto Fusioneering’s favor.

Undo crushes $12M funding round to, um, undo carbon pollution

With the timeline to dangerous warming shortening, and no sign of carbon pollution abating, plenty of founders are rushing to start carbon removal companies.

There are a number of different ways to take carbon out of the atmosphere. The most widely known way is to blow air across a material that absorbs carbon dioxide and then find something to do with the gas (usually stick it deep underground). If that sounds expensive, it is, which is why other companies are crushing rock to speed up a process known as enhanced weathering.

Several types of rock naturally absorb carbon dioxide. Problem is, they’re very slow at it. But humans can speed things up by crushing the rocks and increasing the surface area exposed to the atmosphere. That’s what Undo does with basalt. After pulverizing the volcanic rock, Undo gives it free to farmers to spread on their fields, where it not only sucks down carbon but also adds key nutrients and increases the soil’s pH (both good things).

Undo announced on Monday that it had raised $12 million in funding and signed a $1 million contract renewal with Stripe for carbon removal services. Lowercarbon Capital and AENU led the round.

The startup is entering an increasingly crowded field. Competitors Lithos Carbon, which also uses basalt, and Eion, which uses olivine, both raised rounds last year. But given the amount of carbon that needs to be removed, the number of farmers who use pH-boosting soil amendments, and the logistical challenges of shipping rock, enhanced rock weathering is unlikely to be a winner-take-all field. Instead, several companies might bump up against each other in competitive markets, while smaller ones might support a single player.

Whether those constraints prevent startups from scaling at a pace that pleases venture capital firms remains to be seen. But for now, they have room to run.