The reason why I became a “winner” in a world where “on the verge of bankruptcy” occurred one after another.Kiko Tech, US CEO Persefoni, who is making a full-scale entry into Japan, talks

Persefoni, a global company in the field of CO2 visualization (calculation of CO2 emissions), begins full-scale deployment in Japan.

Founded in Arizona, USA in January 2020, PersefoniIn the Series B round in 2021, we will raise $ 101 million (about 14 billion yen) from various companies such as leading institutional investors, EDF, the largest electric power company in France, and Sumitomo Mitsui Banking Corporation from Japan. The cumulative funding amount exceeds 104.9 million dollars (about 20 billion yen).

It is one of the leading companies in the CO2 visualization market, having been selected for the second consecutive year since 2022 for the “Global Clean Tech 100,” which selects the 100 best climate tech companies that investors, companies, and experts are paying attention to.

Why is Parsephoni attracting attention as CO2 emissions calculation software startups are flooded not only in Japan but around the world? Kentaro Kawamori, CEO and co-founder of Persefoni, gave an exclusive interview to Business Insider Japan in late April, talking about his motivation for founding the company, the company’s strengths, and future developments in Japan.

(Interviewer: Takashi Mitsumura, text/composition: Yoko Yuda)

Who is Parsephony

Persefoni’s name may have first been known to the world at the pitch event of “SXSW (South by Southwest) 2021”, a festival of technology, music and movies that gathers startups from around the world. It won the highest award in the Enterprise & Smart Data category.

However, Mr. Kawamori has been attracting attention even before that. In 2020, when he was the first Chief Digital Officer of Chesapeake Energy, known as a pioneer in shale gas development, he was also selected as one of Forbes’ “30 UNDER 30”, which recognizes innovators under the age of 30 who change the world. He was 28 years old at the time.

Mr. Kawamori explains why he launched a visualization (=Carbon Accounting) software company for the purpose of reducing CO2 emissions.

“Because carbon accounting was one of the trends in the market, because investors and regulators were paying attention to it, and it still is.”

talk to.

It was during my time at Chesapeake that I felt this firsthand. The U.S. Environmental Protection Agency (EPA) required carbon accounting disclosures showing how much CO2 was being emitted by industries with high CO2 emissions. Chesapeake was also included.

At a media roundtable held by Persefoni in Japan in late April, Kawamori said, “I had a very difficult time with the calculation and disclosure of carbon accounting required by the EPA.” However, it was this hardship that made him realize new business opportunities.

“There were so many companies working[with manual input]in spreadsheets,” he said.

For Kawamori, who had stepped up in the digital field during his career, it was natural for him to think that software could solve problems.

According to Kawamori, growing up in Germany, an environmentally advanced country, has had a big impact.

“I was born in Japan and moved to Germany at the age of 2 because my mother was German. Living in a remote German countryside surrounded by mountains and trees, I developed a love for nature and an interest in climate issues. It was only natural for me to say that.

Persephoni was an opportunity to combine sustainability and a passion for technology.It is.”

A global market where venture companies on the verge of bankruptcy continue one after another

About 3 years after its founding.

The golden age of startups called the bubble has passed, and the wave is also surging into the carbon accounting field.

Mr. Kawamori points out that in the field of carbon accounting, there are a series of ventures on the brink of bankruptcy due to difficult management. The reason for this, he says, is that “the carbon accounting standards required for companies are becoming stricter, and the software is also being required to have extremely high technology.”

“It may be one of the cultures of the startup industry, but there is a custom called ‘Fake it until you make it’ that ‘I don’t care if it’s a lie until it’s realized.’ Competitors acquire customers in this way, and in reality, many of them are adopting business models such as consulting or manual carbon accounting.

But we didn’t go thereBased on a long-term strategy, we have invested heavily in R&D and focused on the original purpose of enabling automatic carbon accounting.”

For startups to survive, it is important to develop their business based on a long-term vision and strategy.

Kawamori knew this firsthand, having been a venture partner at an investment fund targeting early-stage SaaS companies before founding Parsefoni and selling a software company he co-founded to a consulting firm.

“For startups, it is very important to raise funds from investors, turn it into the black over several years, create a business that does not rely on venture capital, and stand on its own. They can’t cross the ‘valley of death’ and are eliminated before they can turn a profit.”

Persefoni will also launch a service equipped with AI from the fourth quarter of 2022 (October to December). In April 2023, the company announced that it will be equipped with three AI functions: data anomaly detection, data inconsistency detection and resolution, and emission factor recommendations based on user activity data. We are making steady progress.

Raises $100 million in R&D and ‘no bargain’ strategy

Mr. Kawamori says that startup business tends to:

“There is a tendency to rush to collect the funds raised and sell products and services even when the unit economics (profitability per customer) is bad. It will end.”

points out. That’s why Parsefoni says, “We don’t sell cheap.”

“Our strategy is to share the recognition among the executives that we will sell products at a minimum price of this level, and to first make strong investments in R&D to expand our market share, and from there we will steadily move into the black. Investors also understand our long-term strategy and consider our growth over a span of four to five years.”

It’s no coincidence that it’s been blessed with investors.

Kawamori said in March on the American podcast “Category Visionaries,”When it raised $101 million in a series B round in 2021, it intentionally avoided Silicon Valley investors due to the special environment of 2021, which was said to be the start-up bubble.We know the importance of the carbon accounting category and chose investors who have a long-term perspective, rather than investors who seek short-term profits.

As a result, Parsefoni “expects to be able to stand on its own in about two years.”(Mr. Kawamori). As of April 2023, we have acquired more than 225 customers globally, mainly in the major manufacturing, energy, and financial industries. “By the end of 2023, it’s expected to be two to three times that size,” Kawamori said in the podcast mentioned earlier.