**Tallinn**: Esgrid, an AI-driven ESG risk management startup founded in 2023, has secured fresh funding to broaden its SaaS platform from ESG compliance to wider supplier management, responding to shifts in EU regulations and demand for cost-efficient, automated supply chain solutions across Europe.
Tallinn-based startup Esgrid, specialising in Environmental, Social, and Governance (ESG) risk management, has secured new funding aimed at broadening its service portfolio to include supplier management. Founded in 2023, Esgrid’s AI-powered Software-as-a-Service (SaaS) platform initially focused on automating ESG data collection, analytics, reporting, and engagement within supply chains for medium-sized businesses. This automation reportedly reduces related costs by up to 90 per cent and has already attracted dozens of flagship customers across Europe, including several publicly listed companies.
The latest funding round was led by 2C Ventures, alongside continued support from earlier investors Startup Wise Guys, Greenco Ventures, and Lemonade Stand. The capital injection will enable Esgrid to expand beyond ESG compliance into wider supplier management functions, starting with supplier onboarding, evaluation, and engagement processes. The company has launched the first feature of this extended offering: an AI-based supplier evaluation template generator. This tool, powered by Esgrid’s AI agent Grid, allows users to create customised supplier evaluation templates in approximately 30 seconds.
Oksana Tolmatšova, co-founder and CEO of Esgrid, explained the rationale behind the expansion: “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, expressed confidence in Esgrid’s trajectory, stating, “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.”
This strategic expansion comes amid a changing regulatory environment in Europe impacting ESG initiatives. The European Union has recently implemented a “Stop-the-Clock” proposal approved by the European Parliament, which pauses and scales back significant ESG regulations, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Among the changes is the Omnibus simplification package, which increases the employee threshold for CSRD compliance from 250 to 1,000 employees, thereby exempting approximately 80 per cent of companies from the regulation’s scope. Consequently, the volume of reporting requirements and disclosed data points has significantly decreased.
These regulatory shifts have prompted ESG-focused companies like Esgrid to reevaluate their business models and product offerings. The recent investment raised by Esgrid is seen as a demonstration of adaptability and strength, facilitating accelerated product development to encompass a broader array of supplier workflows with a particular emphasis on AI-driven automation.
The evolving landscape highlights a movement within Europe towards moderating and simplifying ESG mandates, balancing regulatory ambitions with practical business considerations amid economic and geopolitical complexities. Esgrid’s expansion into comprehensive supplier management positions it to meet the evolving needs of European companies navigating this regulatory reset.
Source: Noah Wire Services
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