BlackRock’s Minority Investment In Clarity AI Validates The Huge ESGtech Opportunity
The world’s largest asset manager, BlackRock, today announced an investment in Clarity AI, a data science software provider with a focus on sustainability analytics, ESG and social impact investing. Founded in 2017 by Rebeca Minguela, Clarity AI has offices in Madrid, Spain and New York and is previously reported to have raised $15 million in November 2020 from Deutsche Börse and Mundi Ventures. Software businesses can tap a huge range of funding sources some with limited added value beyond the cash. So the fact that BlackRock has invested in Clarity AI following rapidly on the heels of Deutsche Börse is a validation of the firm’s product strategy and growth strategy. The plan is to integrate Clarity AI into BlackRock’s Aladdin platform for investment professionals.
What’s unique about the Clarity AI vision? Firstly, the firm has positioned itself at the intersection of three mega-trends: sustainability, digitization and transparency. Founder Rebeca Minguela has identified a generational shift: younger people don’t just want control over their portfolios from a risk/reward perspective but they increasingly want to know what the social impact is of the firms in their portfolio. Ultimately all financial ESG products reflect this shift in investment values. Secondly, Clarity AI is developing a data platform that meets the requirements of diverse user groups: asset managers, commercial banks, investment consultants, finance teams at corporates, insurers, pension funds and wealth managers. This is not just an application for finance teams at corporates or a pure fintech play. Thirdly, the Clarity AI cloud platform aligns with the concept of a flexible ESG information architecture as detailed by Verdantix. This is an essential aspect of any ESGtech proposition as reporting standards, data definitions and information requirements will evolve rapidly over the next three years. Providing a data model that can flex to meet the needs of multiple audiences over time is a big positive.
Whilst this investment by BlackRock may strike fear into the hearts of other tech entrepreneurs who have launched ESG and sustainability propositions they should instead leap for joy. This minority investment in Clarity AI by BlackRock will boost the ESGtech sector as a whole and give confidence to PE investors that the smart money is already flowing into new ventures. BlackRock has positioned itself in the vanguard of global sustainability thinking in the financial world. This is no blip.
To better understand the ESGtech market attend the forthcoming Verdantix webinar: “Investor Focus On ESG Will Reshape The Sustainability Market Opportunity”.