New ESG Technology Platform Novata Closes $21 Million Series A Funding Round

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11/09/2021 - 09:01 AM

Principal investors include a unique consortium of non-profit and for-profit leaders, representing one of the largest initial funding rounds for a public benefit corporation

NEW YORK--(BUSINESS WIRE)-- Novata, an innovative new technology platform and public benefit corporation that provides the private markets with a cutting-edge Environmental, Social and Corporate Governance (ESG) solution, has announced a Series A investment of $21 million. The investment represents one of the largest initial funding rounds for a public benefit corporation. Principal investors include members of the one-of-a-kind consortium that collaborated to launch Novata in October 2021, including the Ford Foundation, S&P Global (NYSE: SPGI), Hamilton Lane (NASDAQ: HLNE) and Omidyar Network. This significant funding enables Novata to meet the private markets' critical and immediate need for an independent, unbiased and flexible open architecture platform to more consistently report on relevant ESG data.

“Much of the economic attention on sustainability to date has focused on the public markets. Yet the private markets represent the majority of economic activity globally—and a substantial, but historically overlooked, opportunity to positively drive meaningful change,” said Alex Friedman, Chief Executive Officer of Novata. “Through our consortium-backed funding, we have brought together the brightest minds in social justice and financial data to create a simpler, smarter and more actionable method for ESG measurement in the private markets.”

The Series A investment helps Novata bring to market its three-part open architecture approach to holistic ESG analysis—including a streamlined ESG reporting framework that builds on previous industry initiatives and is currently free for all companies to immediately leverage, plus a fee-based secure platform for objective ESG data capture, analysis, reporting and benchmarking against private and public company peers.

Beta customers will have access to the platform before the end of the year, and broad access is due to launch in early 2022.

“Many companies, both private and public, are feeling enormous pressure to showcase the impact of their corporate ESG efforts to their investors, employees, local communities and more,” said Lorraine Spradley Wilson, Chief Impact Officer and Head of ESG Methodology at Novata. “That’s where we come in—Novata is helping to illuminate the bigger ESG picture with tools that are practical for all private market participants, regardless of where they are on their individual journeys.”

Novata’s adaptable, independent and infrastructure-driven approach represents a major step forward in the current landscape of ESG tools and metrics. The Novata solution takes a much-needed ecosystem approach for the private markets, bringing together the non-profit and for-profit sectors to help drive impact toward inclusive capitalism.

“At The Ford Foundation, we believe that clear, consistent and robust measurement of company ESG performance is a prerequisite for creating an economy that works for everyone,” said Margot Brandenburg, Senior Program Officer for Mission Investments at the Ford Foundation. “Novata brings forth the technology infrastructure and benchmarking capabilities needed to enable private companies and their owners to manage their impact on society, and we’re proud to be part of this initiative.”

In addition to the principal investors, Novata’s founding employees are investing in the company through the Series A funding. Further, a range of leading private equity firms serve as advisors to the Novata consortium, including Bridgepoint, Clearlake Capital Group, Kohlberg & Co., KPS Capital Partners, Lindsay Goldberg, Summa Equity, Thomas H. Lee Partners and The Vistria Group. Several of Novata’s general partner advisors—The Vistria Group, Clearlake Capital Group and Kohlberg & Co.—have made investments in support of Novata, with all proceeds from such investments to be donated to nonprofits.

To learn more about Novata, please visit the website and watch the launch video here. Follow Novata on LinkedIn to keep up with the company’s latest news and views.

About Novata

Novata is a public benefit corporation created to help private equity firms and private companies navigate the ESG landscape by providing relevant reporting metrics, a contributory database to store information, and tools for analysis and reporting to key stakeholders, including limited partners and regulators. Founded to empower the private markets in achieving a more sustainable and inclusive form of capitalism, Novata’s aim is to help the private markets avoid fragmentation of ESG standards. Novata was formed in partnership with the Ford Foundation, S&P Global, Hamilton Lane and Omidyar Network—with additional funding provided by its co-founders and independent chair—and is majority-controlled by mission-driven organizations and its employees. For more information, please visit https://www.novata.com/.