Ecologi Buys Net Zero Now As VCs Warn of Potential Carbon Accounting Software Market Shakeout

Ecologi has acquired Net Zero Now, a carbon accounting software platform provider. Financial terms of the deal were not disclosed.

Ecologi, founded in 2019, is based in Bristol, England. The software development company and Impact Funds provider assists customers with such climate solutions as reforestation, habitat restoration, carbon avoidance and removal projects. Ecologi's community, spanning. more than 24,000 businesses, has removed of over 11,000 tonnes of CO₂ from the atmosphere, the company asserts.

Ecologi raised $8 million as of 2021, according to TechCrunch. We don't know if the startup has raised more funding since that time.

Net Zero Now, founded in 2021, is based in London, England. The company's software and allows customers to measure, reduce and report their scope 1, 2 and 3 GHG (greenhouse gas) emissions. Early Net Zero Now adopters include Coca Cola Europacific Partners, L'Orèal, Heineken, Pernod Ricard, Subway, Hard Rock Cafe, Adnams, Edgbaston and James Cowper Kreston.

We don't know how much early stage funding -- if any -- Net Zero Now raised. The company's website still features a call for funding page as of February 11, 2025.

Carbon Accounting Software Market: Shakeout Coming?

The M&A deal surfaces at a key time for the carbon accounting software market. Indeed, numerous venture-backed startups will need more funding or strategic exits in 2025, sources tell Sustainable Tech Partner.

However, more funding could be hard to find after some carbon accounting software startups quietly underperformed their venture capitalists' expectations, multiple VC sources tell Sustainable Tech Partner.

Further complicating matters for startups, big ERP and cloud application providers such Microsoft Cloud for Sustainability, SAP Green Ledger, and IBM Envizi are in the carbon accounting market -- though in many cases enterprise ESG solutions don't scale down to SMB (small and midsize business) customers.

Ecologi Acquires Net Zero Now: Potential Customer Benefits

Meanwhile, Ecologi and Net Zero Now sound extremely upbeat about their combined business prospects.

Among the reasons: The deal will allow business to "measure, reduce and report their carbon footprint using sector-specific protocols endorsed by leading industry bodies, whilst funding world class verified climate projects -- all in one solution," Ecologi said.

In a prepared statement about the deal, Ecologi CEO Dimitri Theocharis said: "This acquisition represents an evolution in how businesses can approach climate leadership. Companies need solutions, not tools. At the same time, sectors have diverse characteristics and needs. By combining Net Zero Now's sector-specific protocol expertise with Ecologi's platform funding top-tier climate projects, we're creating a tailored and complete solution helping businesses lead their industries towards net zero."

Added Neil Ross Russell, managing director of Net Zero Now: "Businesses want to take climate action, but they want to know they're doing it right and what's right for a restaurant business is not the same as what's right for an accounting firm.  They need industry-specific guidance and clear pathways to climate leadership. By joining forces with Ecologi, we're creating a platform that allows us to provide credible, simple and affordable, sector-specific, end-to-end climate solutions for businesses in our existing sectors and collaborate with industry partners on new sector-led solutions."

The combined business will operate under the Ecologi brand. Initial vertical market focus areas include hospitality and professional services, with plans to tackle additional industries throughout 2025, the buyer said.

M&A Activity: Carbon Accounting Software Platform Acquisitions

M&A activity involving carbon accounting software startups has been steady -- though in most cases we don't know if the deal valuations were strong. Example business combinations include:

• September 2024: Gevo acquired CultivateAI to further focus on carbon accounting software and data in the agriculture market. Gevo paid $6 million in cash, with additional earn-out payments potentially possible, the buyer said.
• August 2024: Asuene acquired CoRocket and launched an associated business called Asuene Veritas. Financial terms of the deal were not disclosed.
• June 2024: Workiva acquired Sustain.Life for $100 million.

Also of note: Private equity firm Thoma Bravo may be seeking to sell ESG software provider Cority for roughly $2 billion, Reuters reported in mid 2024.

Moreover, multiple carbon accounting software startups received funding ahead of Donald Trump's return to the White House in January 2025. Trump's economic strategy and rollback of multiple Biden Administration climate policies have made some climate tech investors nervous.