By Daniel Lanyon on Wednesday 11 November 2020
The firm says it is seeing increased demand from institutional portfolio managers looking to hedge exposure to carbon-intensive investments or meet ESG benchmarks.
Spark Change, a new fintech aimed at simplifying institutional investment in green financial products, has closed a $4.5m (£3.5m) funding round led by Barclays.
FinLab EOS VC Fund (a partnership with Block.one and FinLab AG) and Solactive AG also participated in the round.
Stefan Schuetze, Managing Director of FinLab, and US serial entrepreneur Paul Stahura will join the board of directors, while Ryan Hayward, Head of Strategic Investments for Europe and Asia at Barclays, will join as board observer.
Other investors in the current and previous rounds include Techstars, Swing Ventures, Librae Holdings, which is owned by the trustees of a discretionary trust of which Conservative party donor Vincent Tchenguiz is a beneficiary. Angel investors Matthew Le Merle and Chris Adelsbach also participated in the round.
For investment managers, ESG (Environmental, Social, and Corporate Governance) strategies have been one of the ripest areas for growth in recent years despite a lack of clear consensus on definitions and industry standards. According to Morningstar, ESG funds attracted $45.6bn of inflows in Q1 2020.
Spark Change’s platform provides investors with direct exposure to the value of physical carbon emission allowances.
Ryan Hayward, principal investments at Barclays, says the seed round will help the company further develop its proposition.
“Spark Change lets institutions and companies easily gain access to and develop their own innovative ESG investment products to offer their customers. That’s a compelling proposition,” he said.
The firm, which has offices in London, Seattle and Boston, says it is seeing increased demand from institutional portfolio managers looking to hedge exposure to carbon-intensive investments or meet ESG benchmarks.
Daniel Barry(pictured), chairman of Spark Change said the company will use the funding to launch its first range of products later this year.
"We created Spark Change to address the lack of innovative green financial products that provides exposure to physical carbon allowances," he said.
Stefan Schuetze, Managing Director of FinLab EOS VC Fund, added: “By leveraging distributed ledger technology to scale key components of its operational infrastructure more easily and cost effectively, we’re excited to see Spark Change has one foot in the present and one foot in the future.“