**Tallinn**: Estonian startup Esgrid raises new funds led by 2C Ventures to expand its AI-powered ESG risk management software into broader supplier management services amid shifting European ESG regulations and streamlined compliance requirements.
Tallinn-based startup Esgrid, specialising in ESG (Environmental, Social, and Governance) risk management, has secured new funding to accelerate its expansion into supplier management services. The recent financing round was led by 2C Ventures, with continued support from existing investors Startup Wise Guys, Greenco Ventures, and Lemonade Stand.
Established in 2023, Esgrid initially focused on simplifying ESG risk management specifically within supply chains for medium-sized enterprises. The company’s AI-driven software-as-a-service (SaaS) platform automates the collection, analysis, reporting, and engagement of supply chain ESG data, achieving cost reductions of up to 90 per cent. Esgrid’s client roster already includes several prominent European organisations, including publicly listed companies.
The fresh capital injection is intended to broaden Esgrid’s product portfolio to encompass a wider array of supplier management functions, starting with onboarding, evaluation, and engagement processes. The company has just introduced its first feature under this new strategy: an AI-powered supplier evaluation template generator. This tool utilises Esgrid’s AI agent, Grid, enabling users to design customised supplier assessment templates in approximately 30 seconds.
Oksana Tolmatšova, co-founder and CEO of Esgrid, remarked on the company’s evolution: “Working with our first customers, we quickly proved that we can cut costs by replacing manual supplier processes with digital workflows. While we started with supply chain sustainability management, it was clear there’s strong demand for a broader solution, covering supplier evaluation, document management, and communication. That’s why we’re expanding into wider supplier management. Our AI-first product adapts to each company’s size and needs, delivering the right solution at the right cost.”
Martin Reimand, Founding Partner at 2C Ventures, underlined the strategic importance of Esgrid’s solution amid current global challenges. Speaking to Tech.eu, he said, “In an era of growing geopolitical uncertainty, supply chain resilience has never been more critical. Esgrid has built an impressive platform for supply chain ESG risk management, and we’re confident in their ability to expand beyond ESG into broader supply chain risk areas. We are excited to support this strong team as they take the next step in their journey.”
Esgrid’s adaptation and growth occur in the context of significant changes in the European ESG regulatory environment. Europe, which has historically been a leader in enforcing ESG standards, is undergoing a regulatory reset that has led to the postponement and scaling back of several key rules. Notably, the European Union has put on hold the implementation of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
Following the European Parliament’s approval of the “Stop-the-Clock” proposal, deadlines for these mandates have been delayed, and the extent of mandatory reporting reduced. The Omnibus simplification package further raised the employee threshold for CSRD compliance from 250 to 1,000 employees, effectively removing around 80 per cent of companies from the regulation’s purview. This change has also diminished the amount and granularity of data companies must disclose.
These regulatory shifts have presented challenges for firms operating in the ESG space, requiring adaptation to a more moderate and simplified compliance landscape. Esgrid’s recent funding and pivot towards broader supplier management functionalities demonstrate the company’s response to these evolving market dynamics, with increased emphasis on AI-supported automation to meet user needs efficiently.
The funding is expected to accelerate Esgrid’s product development efforts, reinforcing its position in the European ESG and supplier management markets as they navigate an increasingly complex and fluctuating regulatory climate.
Source: Noah Wire Services
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