Sherpa Raises 1 Billion Yen Through Series B Funding to Enhance Sustainability Efforts

Sherpa Raises 1 Billion Yen in Latest Funding Round

Sherpa and Company, headquartered in Shinagawa, Tokyo, has successfully closed its first round of Series B funding, raising a total of 1 billion yen. This move propels the company’s total funding to approximately 1.5 billion yen since its inception, marking a significant milestone in its journey toward integrating profitability and sustainability. With plans for a second closing in the Series B round, the company aims to enhance its sustainability data platform, SmartESG, which has garnered interest from various corporate partners.

Strategic Investors Join the Funding Round

The latest funding round was led by existing investor WiL, alongside existing shareholder Global Brain Corporation. Notably, this round also welcomed investment from corporate venture capital (CVC) arms of ANA Holdings and Canon Marketing Japan. ANA Holdings, an active user of Sherpa’s services, is looking to deepen its collaboration, given the promising results from the platform. On the other hand, Canon Marketing Japan sees synergies between its document management consulting services and Sherpa’s expertise in sustainability and ESG data structuring and analysis.

Adapting to Rising Demand for Sustainability

Today’s corporate landscape demands transparency and responsibility in areas like emissions tracking, supply chain selection, human resource strategies, and governance structures. This shift toward sustainability has become a crucial topic for businesses, as evidenced by predictions for the ESG investment market, anticipated to grow from $35.48 trillion in 2025 to $167.49 trillion by 2034. With regulators in Europe enforcing mandatory sustainability disclosures, Japanese enterprises are increasingly forced to comply, thereby fueling the demand for comprehensive sustainability data management.

Many companies, however, face significant hurdles in this area, often struggling with confusion over disclosure requirements and lacking the necessary guidance to implement effective practices. Sherpa is stepping in to bridge this gap with SmartESG, a one-stop platform that centralizes sustainability information and standardizes disclosure processes, allowing businesses to utilize sustainability data efficiently in decision-making processes.

Rapid Adoption and Market Growth

Since its launch in November 2022, SmartESG has been adopted by over 70 companies, covering roughly 15% of enterprises with market capitalizations exceeding 500 billion yen, amassing a cumulative market cap of 200 trillion yen. The platform focuses on enhancing disclosure efficiencies and facilitating complex analyses, responding to the increasing number of sustainability rating agencies worldwide. With planned capabilities set to support consolidated sustainability data preparation by 2024 and new AI-driven services aimed at streamlining the disclosure workload, Sherpa is poised for substantial growth.

Insights from Investors

Following the funding announcement, investors offered their insights. Kenji Onishi from WiL praised Sherpa for its forward-thinking approach to sustainability and its potential to transform corporate practices. Similarly, Hirotaka Togashi of Global Brain emphasized the company’s focus on creating meaningful dialogue between businesses and stakeholders regarding non-financial disclosures.

ANA Holdings’ Yoshiyuki Tsuda highlighted the strategic importance of leveraging non-financial information for corporate value enhancement, noting the efficacy of Sherpa's platform. Canon Marketing Japan’s Madoka Nishizuka recognized the critical need to address deeper issues surrounding human capital and fair labor practices, indicating that Sherpa’s solutions are adaptable and critical for achieving this vision.

Future Direction

CEO Atsushi Sugimoto expresses immense gratitude for the support shown in this funding round. He remarks that Sherpa has moved past merely providing basic functionalities of sustainability reporting to now aligning its services with long-term business strategies for its clients. The funds raised will be deployed to enhance SmartESG into an all-in-one tool while also reinforcing customer support systems.

With hiring intensifying particularly for roles within sales, customer success, sustainability consulting, and AI product development, Sherpa is gearing up for further expansion. This reflects the company's dedication to innovating solutions that not only comply with regulatory requirements but also foster sustainable practices within the corporate sector.

Sherpa continues to forge ahead, determined to unlock the potential of non-financial information and advance corporate sustainability management, reinforcing its position as a leader in this critical marketplace.