Tallinn-based ESG (Environmental, Social, and Governance) risk management startup Esgrid has raised new funding to expand into supplier management.
New investor 2C Ventures led the funding which was supported by earlier backers Startup Wise Guys, Greenco Ventures, and Lemonade Stand.
Check out our earlier interview with Esgrid.
Founded in 2023, Esgrid began by solving the complexity of supplier ESG risk management in medium-sized businesses. Their AI-powered SaaS platform automates supply chain ESG data collection, analytics, reporting and engagement, while reducing costs by up to 90 per cent.
Esgrid has already secured dozens of flagship customers in Europe, including multiple publicly listed companies.
The company has now raised additional funding to support expansion into the supplier management space, starting with supplier onboarding, evaluation and engagement. The company has just launched the first feature of their supplier management platform – an AI-based supplier evaluation template generator.
Users can create a custom supplier evaluation template with the help of Esgrid’s AI agent Grid in just 30 seconds.
According to Oksana Tolmatšova, Esgrid’s co-founder and CEO:
"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."
Hendrik Reimand, the Founding Partner at 2C Ventures, explained why they decided to back Esgrid:
“In an era of growing geopolitical uncertainty, supply chain resilience has never been more critical.
Esgrid.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.”
ESG retreat? Europe hits pause on sustainability rules amid regulatory reset
European companies are undergoing a significant shift in their approach to ESG practices, driven by regulatory changes, economic pressures, and evolving investor expectations. While Europe has historically led on ESG, recent developments indicate a move toward moderation, simplification, and, in some cases, a partial retreat from the most ambitious ESG mandates.
The European Union has recently paused and scaled back key ESG regulations, most notably the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). With the European Parliament’s approval of the “Stop-the-Clock” proposal, the rollout of these regulations has been halted, resulting in postponed deadlines and a reduction in the scope of mandatory reporting.
Additionally, the Omnibus simplification package has raised the employee threshold for CSRD compliance from 250 to 1,000, effectively removing about 80 per cent of companies from the law’s scope and substantially reducing both reporting requirements and the number of data points companies must disclose.
This has forced ESG-focused startups like Esgrid to pivot or expand from their original product offerings — and the funding raised to do so is a testament to their resilience. The investment will accelerate product development to cover a broader range of supplier workflows, with a strong focus on AI-supported automation.
Lead image: Esgrid. Photo: uncredited.
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