ESG Data Specialist TruValue Labs Secures $13.6 Million in New Funding

The San Francisco-based company will use the investment to expand its language coverage and its AI-driven predictive analytics.

ESG

TruValue Labs, which specializes in environmental, social and governance (ESG) data, has closed a $13.6 million Series A funding round, which was led by Katalyst Ventures.

Hendrik Bartel, CEO and co-founder of TruValue, says that the company will use the investment to expand the depth and breadth of its platform to include multiple languages, as well as to add new asset classes to its coverage areas.

“The amount of unstructured data sources is growing quickly, so we are always looking to add additional coverage where the data is relevant,” he says. “In addition, we are preparing to expand from intangible risk issues, such as ESG, to additional risk classes and macro risks.”

TruValue is currently developing a Japanese-language model and a German model, which are slated to be released in the second half of 2018, Bartel tells WatersTechnology. The vendor will expand its language capabilities continuously from there.

As was detailed in this feature in the August 2017 issue of Waters magazine, TruValue’s Insight360 platform uses artificial intelligence—and, most notably, natural-language processing (NLP)—to take in large quantities of unstructured data to develop an ESG score. The company’s AI-driven algorithms sift through various sources of information to develop this score, such as magazines, trade publications, news sites, thought-leader blogs, a parsed set of social media “experts,” as well as government filings.

Increasingly, firms are incorporating ESG data into their models and portfolios, and independent research has found that firms with superior performance on material sustainability issues tend to outperform firms with inferior performance on these issues. One such report, released in 2015 by Harvard Business School, titled ‘Corporate Sustainability: First Evidence on Materiality‘—found an estimated 3.39 percent to 8.85 percent annualized alpha improvement for firms with high performance on material sustainability issues as prescribed by the Sustainability Accounting Standards Board (SASB).

Bartel says that as the company expands its language and geographical coverage, it will also look to grow its team of data scientists and quants with AI experience. This will help the company to “start building algorithms that provide predictive analytics for our customers.”

“Our product is rooted in big data and we have harnessed millions of daily ESG data points which gives us endless possibilities for expanding and evolving our product using cutting-edge techniques,” he says. “We are also investing in growing our sales teams, bringing on a number of channel partners, as well as growing the product management team.”

Other investors beyond Katalyst include Hearst Financial Venture Fund, The Entrepreneurs’ Fund, Sun Hung Kai Strategic Capital Limited, as well as individuals including William Campbell, the former chairman of JPMorgan Chase Card Services and CEO of Citibank Global Consumer, and Tom Chavez, former CEO and co-founder of Krux.

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