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Clarity AI, a fintech company that has developed a platform that empowers investors to manage the impact of their portfolio, has raised US$15 million in its latest funding round. The financing will be used to fuel the expansion of its solution, which leverages big data and machine learning to assess the social and environmental impact of investments on all stakeholders. The news comes at a time when sustainability and social justice are high on the global agenda, resulting in far greater interest in responsible impact investing.
Clarity A has announced the completion of a virtually-held US$15 million funding round, led by Deutsche Börse AG and co-investor Mundi Ventures. The investment will be used to support Clarity AI’s expansion plans, which includes scaling-up its proprietary artificial intelligence technology and integrating with large financial service platforms to accelerate investors’ sustainability and impact reporting.
We are excited to be in a partnership that puts impact at the heart of investment.Sebastian Ceria, CEO of Qontigo
The New York-based startup also revealed that it is now “exploring potential collaboration opportunities” with Deutsche Börse, including its Qontigo financial intelligence system, which provides indices and analytics.
“This partnership reflects our mutual commitment to the ongoing enhancement of sustainable investing and the application of the latest technology in pursuit of this goal,” said Sebastian Ceria, CEO of Qontigo. “We are excited to be in a partnership that puts impact at the heart of investment.”
Since its inception in 2017, Clarity AI has gained a presence across U.S., Spain and the U.K. and has grown its network of clients representing over US$3 trillion assets under management. Its platform uses big data and machine learning to assess sustainability for all societal stakeholders, and has been described as the “most reliable tech platform on social and environmental impact”.
“Investors attempting to evaluate impact have faced fragmented and unreliable data, inconsistent subjective definitions, and a lack of standards and tools for comprehensive analysis,” explains Rebeca Minguela, founder and CEO of Clarity AI. “Historically it has been too hard and resource-intensive to get accurate and transparent insights. Clarity AI provides a solution for that.”
2020 has seen extraordinary volatility and uncertainty – from Covid-19 to social justice protests. It has never been more important for investors to have accurate insights on the true impact of the companies in which they place their trust and their money.Rebeca Minguela, Founder & CEO of Clarity AI
The firm’s funding news comes as sustainable and impact investments have grown significantly, specifically amid the coronavirus pandemic, which has turned investors’ attention to the environmental, social and governance (ESG) aspects of their decisions. Clarity AI says that over the past six months, they have experienced a major uptick in demand and have since signed on clients with eight times the assets under management compared to the preceding period.
“2020 has seen extraordinary volatility and uncertainty – from Covid-19 to social justice protests,” said Minguela. “It has never been more important for investors to have accurate insights on the true impact of the companies in which they place their trust and their money.”
Investors have also noticed that ESG-focused investments have also brought in greater financial returns. Recent statistics obtained by global research firm Morningstar shows that environmentally sustainable funds have outperformed traditional funds across the board, matching or beating them for 10 years prior to the pandemic and during the coronavirus sell-off.
Lead image courtesy of iStock.