Europe continues to take ESG seriously, and Apiday helps companies comply

European regulations are turning ESG reporting from a nice-to-have into a necessity. That’s creating new winds for startups like Paris-based Apiday, whose platform targets private equity funds and blue-chip companies that need to track and pilot sustainability practices.

Asset management firms have been a key target for Apiday, especially European ones. Due to the Sustainable Finance Disclosure Regulation (SFDR), it’s not just impact funds that are closely monitoring sustainability metrics: companies of all kinds are now paying attention to ESG reporting.

This creates a different environment than when Apiday was founded in 2021, but also one in which the ESG backlash has emerged. Audi CEO Édouard Audi has himself addressed criticism of Elon Musk’s ESG ratings and agrees that they have their limitations. But at Apiday, the focus is on using ESG to create value, not just compliance.

The company just raised €10 million in a Series A funding round, which will help Apiday accelerate its growth in a sector that is home to well-funded competitors such as AlphaSense, Dataminr and Sesamm, as well as FactSet-owned Truvalue Labs.

Like those players, Apiday uses AI to save customers time. But like traditional consultants, it also offers a human experience. That combination of both gives it an edge over competitors old and new, CEO Édouard Audi told TechCrunch.

Another differentiating factor is its expansion plan. With clients in 23 countries and 60% of sales generated outside France, it plans to double its efforts in Europe and open offices in Germany and the UK. As it also aims to improve its 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 management firms.

Before founding Apiday with former investor Charles Moury, Audi co-founded ride-hailing company LeCab, and that journey inspired him to enter the ESG space. Compared to competitors, LeCab did better on some ESG-related measures, Audi said, but that wasn’t adequately reflected in its sales because of a lack of metrics on those topics.

Again, the way investors engage with ESG is not what it used to be; and on the corporate side, ESG reporting is set to get another boost from the Corporate Sustainability Reporting Directive (CSRD). “The importance of ESG data will increase dramatically over the next few years,” said Stanislas Lot, partner who led the round at Daphni.

Data is just the foundation, though. What matters more is what you can do with it. For example, Apiday helps its clients develop roadmaps of around 350 actions they can take to improve their ESG practices after becoming compliant. Funds have already reached this phase, but Apiday expects corporates to follow suit, and it will be interesting to see how quickly they do so.

Series A investors include AENU, Daphni, Galion.exe and SWEN Capital, as well as existing investors Speedinvest and Revent.