European regulation is turning ESG reporting from a nice-to-have into a must, creating new tailwinds for startups like Paris-based Apidagwhose platform is aimed at private equity funds and blue chip companies that want to track and test sustainability practices.
Asset management firms are a key target for Apiday, particularly European ones. Due to the Sustainable Finance Disclosure Regulation (SFDR), it’s not just impact funds that are keeping a close eye on sustainability metrics: all sorts of companies are now paying attention to ESG reporting.
This creates a different environment than when Apiday was founded in 2021, but also one in which ESG backlash has emerged. CEO Édouard Audi Audi himself spoke to Elon Musk Criticizes ESG Ratingsand agrees that these have limitations. But his focus with Apiday is on using ESG for value creation and not just compliance.
The company just raised €10 million in a Series A funding round, which will allow Apiday to accelerate its growth in a sector that includes well-funded competitors such as AlphaSense, Dataminr and Sesamm, as well as FactSet-owned. Truvalue Laboratories.
Like those players, Apiday uses AI to save its clients time. But like legacy consultants, it also offers human expertise. It’s the combination of the two that gives it an edge over old and new competitors, CEO Édouard Audi told JS in an interview.
Another differentiator is its expansion plan. With customers in 23 countries and 60% of its revenue generated outside France, it plans to double down in Europe, opening offices in Germany and the UK. As it also aims to improve its overall offering, it expects its team to grow from 40 to 70 employees over the next 12 months.
Audi also hopes that Apiday's latest round of financing will strengthen the company's position among asset managers.
Before founding Apiday with former investor Charles Moury, Audi founded taxi company LeCab, a journey that inspired him to enter the ESG sector. Compared to its peers, LeCab performed better in some ESG-related areas, Audi said, but that was not properly taken into account in its sale due to a lack of statistics on these topics.
Again, the way investors are dealing with ESG today is not the same as it was then; and on the corporate side, ESG reporting is getting a new boost from the Corporate Sustainability Reporting Directive (CSRD). “The importance of ESG data will increase dramatically in the coming years,” said Stanislas Lot, the partner who led the round at Daphni.
Data is just the foundation, though. What’s more important is what can be done with it. For example, Apiday helps its clients develop roadmaps with around 350 actions they can take to improve their ESG practices after becoming compliant. Funds have already reached that stage, but Apiday expects corporates to follow, and it will be interesting to see how quickly they do so.
Series A backers include AENU, Daphni, Galion.exe and SWEN Capital, as well as existing investors Speedinvest and Revent.
