Greenly Acquires Normative, Forms Carbon Accounting Giant

Greenly, a prominent French climate tech firm, has significantly expanded its global footprint by acquiring its Swedish competitor, Normative. This strategic move positions the combined entity as a formidable player in the rapidly growing carbon accounting sector, aiming to serve over 4,000 clients across approximately 30 countries.

The acquisition, which involves a share exchange rather than a cash transaction, integrates Normative's shareholders, including notable investors such as Blume Equity, Horizons, ETF, and 2150, into Greenly's capital structure. This consolidation is expected to bolster Greenly's capabilities, particularly in serving larger enterprise clients where Normative has established expertise. The combined entity's annual recurring revenue is projected to surpass €50 million within the next three years, building on their current combined ARR of over €30 million (€20 million from Greenly and €11 million from Normative).

Alexis Normand, co-founder and CEO of Greenly, emphasized the complementary strengths of both companies. "They possess expertise we lacked, particularly in the large enterprise segment, while Greenly brings strong growth momentum," he stated. "Together, we can address a significant market opportunity, as a truly unified solution for carbon accounting is still largely absent." The integration aims to avoid past pitfalls, with Normative's existing team of 170 employees being retained, and its CTO set to assume the CTO role for the unified Greenly organization. Both brands will continue to operate independently for the foreseeable future.

This expansion comes at a critical juncture for corporate sustainability reporting. Driven by regulations like the EU's Corporate Sustainability Reporting Directive (CSRD) and increasing pressure from investors and consumers, the demand for robust carbon accounting solutions is accelerating. The market for carbon accounting software is projected to grow substantially, with some estimates suggesting it could reach billions of dollars globally in the coming years. Greenly's enhanced platform will now offer a comprehensive suite of services, including supplier engagement, product carbon footprinting, life cycle analysis, and multi-standard ESG reporting, catering to this escalating need.

Greenly's strategic vision includes targeting key European markets, with a particular focus on Germany, and deepening its penetration in sectors like textiles and agri-food. The company is also committed to achieving profitability, closely monitoring the Rule of 40 metric, which balances revenue growth with profitability. "Our objective is now to become profitable, and we will be very attentive to the Rule of 40," Normand confirmed. This focus on sustainable growth may attract further investment from growth equity and private equity firms looking to capitalize on the expanding climate tech sector.

The combined entity is setting ambitious targets, aiming to manage one billion tons of CO2 by 2030. This goal is supported by the increasing regulatory push for climate disclosures, such as those mandated for US-listed companies. Despite some regulatory shifts that previously tempered growth, Normand expressed optimism, noting a resurgence in demand. The acquisition of Normative, with its established presence in Copenhagen and London, solidifies Greenly's European position and provides a strong foundation for global expansion in the vital field of carbon accounting.