Venture investors are rallying around a Canadian start-up that’s addressing a huge business problem: helping big companies manage the complexity of climate-risk disclosure.
Toronto-based Manifest Climate, formerly Mantle314, was launched in 2015 as a consultancy by Toronto lawyer Laura Zizzo, who had previously founded Canada’s first law firm focused solely on climate change. In 2020, Manifest pivoted to become a tech start-up, developing AI-based software that automates and expands its consulting services by digitally scraping key data from clients’ financial filings and sustainability reports to ensure they meet growing demands for climate risk disclosure from regulators and investors alike.
Manifest wants to help clients better understand the financial risks they face related to the climate crisis and identify new opportunities in the shift to zero-carbon, all while improving their compliance around disclosure requirements.
In February, Manifest announced the completion of its first financing round: $6.5 million from a coalition of venture capitalists and high-net-worth individuals. That’s encouraging news not just for Manifest, but for all climate-related start-ups in Canada – and not just because Manifest had started out by hoping to raise only $5 million. According to stats from the Canadian Venture Capital and Private Equity Association, Manifest’s $6.5-million “raise” is three times the size of the average Canadian seed round of $1.9 million.
And while Manifest did go looking for funds in Silicon Valley, its raise ended up being fully subscribed by Canadian investors – in just six weeks. “I hope our seed round will give inspiration to other Canadians working on climate challenges,” Zizzo says. “It shows there’s a lot of capital interested in this sector.”
Manifest’s growth could be good for the planet, too. Regulatory bodies are imposing more and more climate-disclosure rules on companies involved in the capital markets. Manifest’s software helps systematize that process, enabling banks, asset investors and public companies to understand their own climate and disclosure issues sooner – so they can communicate better to stakeholders, develop more effective mitigation strategies, and seize new business opportunities faster.
In a release, Toronto investor Daniel Klass – one of the first investors in the Freshii restaurant chain – explained why his private-equity firm, Klass Capital, invested in Zizzo’s plan. “Manifest has a solid management team, unique domain expertise and a long-term vision to create an impact. This aligns with our preference for longer-hold investments so we can support a business through scale as it grows.”
As of early March, Manifest was wrapping up its software trial projects with more than a dozen companies around the world and looking forward to signing its new platform’s first paying clients. Zizzo says the company’s new capital will help the firm hire more staff and redesign its platform to be sleeker and easier to use. “Software is always crude at the beginning,” she notes. “This investment will allow us to build a beautiful product and scale very quickly.”
Zizzo describes Manifest’s brand promise as “best-in-class disclosure.” But once global companies get through this new compliance transition, will Manifest’s role change? Zizzo doesn’t think so. “We’re trying to integrate climate thinking into companies’ decision-making,” she says. “That means rethinking all of our business approaches. This will be an ongoing challenge: I don’t think it’s ever going to be easy.”