When the SEC announced that it planned to require companies under its purview to disclose their climate-related risks and emissions, plenty of companies started publicly clutching their pearls.
Tracking down the extent of their pollution would simply be either too expensive, too difficult or both, they said. No surprise there: Companies strike a similar tone every time a new regulation is proposed. The reality is that the requirement likely won’t be nearly as difficult as they claim, but what if tracking some of their most challenging emissions were as simple as swapping out their corporate spend cards?
“For most companies, 75% to 80% of their emissions typically are Scope 3 emissions, which is all the goods and services that they’re buying,” said Ted Power, co-founder and CEO of Bend. “And so what that means is that the best way for companies to reduce their missions is to address all of those goods and services they’re buying.”
Power and co-founder Thomas Moore started Bend to help companies tackle their Scope 3 emissions. The startup began by selling access to its API for carbon accounting, but the team soon shifted focus to the corporate spend market.
“The thesis is that by making it free and embedding it in a corporate card, there’s a much bigger addressable market, and we can engage more folks in what is essentially the same thing under the hood in terms of the carbon accounting,” Power said.
Like many other credit cards, Bend offers rewards, though not the usual cash back or points-based fare. Instead, it offers carbon offsets. The company is announcing a $2.5 million seed round, TechCrunch+ has exclusively learned.
Since it’s a small team, the company has piggybacked on a selection of projects from Frontier, the advanced market commitment created by Stripe, Alphabet, Shopify and others.
Carbon credits are transacted through Patch, the carbon market. That offers a few advantages compared with a DIY approach. For one, Patch has a relatively large market of vetted projects. And two, it offers a sort of insurance: If one of the projects goes bust or doesn’t deliver on its promises, buyers can swap credits for new ones. Bend only buys those that cost at least $100 per metric ton. “It’s investing in these very scalable carbon very sort of scientifically based carbon removal projects that, if successful, will come down the cost curve,” Power said.
Bend’s current roster of projects includes CarbonCapture, Charm Industrial and Living Carbon. The first two are different approaches to carbon capture and storage, while the latter uses engineered trees that grow faster and in theory sequester more carbon (experts have raised questions about whether they really do, however). That lineup may change, of course. “Ultimately, our goal is to support the best projects,” Power said.
A crowded market
TechCrunch+ has covered the corporate spend market exhaustively in recent years due to a hotbed of startup activity. Brex, Ramp and Airbase, among the better-known, yet-private unicorns competing from the U.S. market, have raised more than $3 billion in combined capital while private, according to Crunchbase data.
That figure doesn’t include Divvy, another player in the corporate spend market that sold to Bill.com in mid-2021 for $2.5 billion. Nor does it include smaller competing startups, let alone international concerns vying for their own piece of global corporate spend market share.
What Bend is building feels related to a trend in the neobanking space, where some market participants have selected a particular angle on the market. This method allows for startups to go after a particular segment of their larger customer pool with a tuned offering. Bend will likely find greater adoption among the climate-conscious than the average business.
That is potentially a nontrivial market. Consumer data indicates that at the personal level, knowledge and concern about our changing global climate is affecting consumption choices; to see corporations take a similar tack is not too great an intellectual leap.
When asked about early traction at Bend, Power said that he is “very optimistic,” while also noting that it is “early days” at the company.
“We have some really awesome early customers,” the CEO said, going on to explain that “the market pull amongst midmarket and smaller businesses is early” and products with a climate-focus are not yet “an absolute requirement.”
Still, Bend sees plenty of growth ahead, noting that while today demand for products like its own come from “founders that are passionate about it” or employees “taking the initiative and making [climate work] a priority,” Power expects lots more of that to come, telling TechCrunch+ that “the trendline is good” and that it is “accelerating.”
Bend is therefore not only an interesting player in a busy market — competing startups have raised lots of capital because they have seen rapid growth due in part to extensive TAM; Bend is not fishing in a small pond — but also a company whose growth will provide us with some on-the-ground data about market demand for products that eschew traditional features for more climate-centric rewards. If it grows quickly, perhaps measured by annualized total spend or customer count, we will be able to infer that market demand for climate-friendly tech products is itself growing.
Growth at Bend, in other words, could imply growth ahead for other startups that are bringing a green sensibility to their markets. For climate tech investors, that would be a welcome data point.
The company will need more capital in time. Its rivals have deep pockets and are competing in feature and price wars. We’ll check back in with Bend in a few quarters to get a handle on how quickly it grows in the interim. And if it manages to secure more funds to pursue its vision.
Business is only a portion of the market, of course, which leads to the question, why isn’t there a consumer version of Bend in the market today? Forget airline miles, we’d like to contribute to helping the planet heal while going about our day-to-day. Power admitted that corporate spend was the team’s logical starting point since that’s what they have experience with. Perhaps consumer spend will be next.
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