Worldfavor raised €10.2 Million to step on the growth gas

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Sweden’s Worldfavor is an early mover platform focused on building digital infrastructure to support supply chain transparency and facilitate ESG, or environmental, social and governance, reporting needs. With $10.2 million in Series A funding, Worldfavor stepped on the growth gas.

Worldfavor already earned €13.4 million in fundraising before this Series A round. SEB Private Equity led the round with participation from existing investors Brightly Ventures and Spintop Ventures.

There has been a growing demand for products and services that are environmentally friendly. This has led to the development of many startups involving transparency in supply chains. Additionally, frustration with so-called greenwashing has fueled this demand. In addition to increased attention from consumers, there have been hard compliance requirements from lawmakers. For example, the EU implemented regulations regarding their green deal. Their goal is to be climate-neutral by 2050— which is something that would have been impossible without serious efforts.

Worldfavor co-founder and CEO Andreas Liljendahl says he welcomes the growing number of companies providing sustainability reporting. He believes this will provide many opportunities for new startups to develop supplementary services to meet increased reporting demands.

According to him, there are many different needs in the space. This means there is plenty of room for many players in the field. TechCrunch reports that he said, “There’s still room for many, many different players because there’s a huge problem— which is that there are different needs in different sectors.”

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Worldfavor’s positioning appears to be a platform for wider reporting and transparency tools instead of ones specific to certain industries or products. Mr. Samuelson affirms this by stating that they strongly believe in their tool being cross-industry compatible. This would lower the reporting fatigue companies have by allowing them to share information with multiple actors, he says. Worldfavor’s tool is designed for multiple stakeholders including investors, corporations and buyers, Samuelson adds.

John explains the necessity of a platform-style method for ESG reporting across global supply chains. He claims that companies are more connected than ever before; therefore, they need to understand information about each other. For example, if someone imports wine to sell, they need to ask about emissions from the producer. Likewise, the producer needs to know about farms in different tiers from them. John says that neither company could understand this on their own— they need a platform to collect and share this information.

The 25,000-organization network was formed in 2016. It’s used to collect and share information to support decisions related to ESG goals— such as reducing carbon dioxide emissions or responding to human rights concerns.

Liljendahl categorizes customers into three buckets. They are large businesses that need to understand the Environmental, Social and Governance status of their entire group. Additionally, small and medium sized businesses that need to perform due diligence on potential investments or portfolio holdings need to perform similar ESG checks. Lastly, procurement organizations and investors required to perform sustainability due diligence fall into this category.

Worldfavor’s mission looked easier five years after launching the network due to network effects enhancing utility and participation. This helped get more provider data into the network, which in turn helped it build momentum and grow.

Continued attention from policymakers regarding sustainability will likely increase demand for products in the future.

Liljendahl says the team addressed the “chicken and egg” issue typically encountered by startups. They focused on getting larger businesses involved; by leveraging the sway these companies have over their supply chains, the team was able to encourage large groups of suppliers to sign up and begin reporting data.

In order to provide Worldfavor’s data accessors with information they can use, providers should plug in their systems. Doing so will increase the visibility of these providers to the network, which could provide a competitive advantage due to the reporting platform’s data accessibility. By sharing their information with one or many stakeholders, providers will gain value by understanding their current state and improving their operations.

Worldfavor’s platform aims to increase transparency by providing access to data provided by self-reporting data providers. Instead of actively auditing these claims, their goal is to provide more accessible data with a higher level of accountability. They hope this will encourage others to develop new solutions for auditing and verifying this data, which they could then partner with for future projects.


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