Canadian tech startup S-Factor launches final seed fundraising round
S-Factor, a private technology firm providing the most comprehensive set of social impact data currently available on the market, announced the launch of its final seed fundraising round via a private equity placement.
The S-Factor will issue up to 1,066,667 Common Shares at a price of $4.69 per share, raising a total of $5 million with gross proceeds going to development and marketing of the S-Factor Solution, as well as for general working capital purposes.
Sustainable and Responsible Investments (SRI), have shown exceptional growth, rising from $13.3 billion to $30.7 trillion of SRI assets under management held by institutional investors between 2012 and 2018 on a global scale US SIF, 2014; GSIA, 2018. The concept of SRI is characterized by a focus on attainment of non-financial utility from investing in assets or portfolios that are driven by sustainability values Bollen, 2007. In SRI, fundamental analysis is combined with an evaluation and integration of environmental, social and governance (ESG) factors Eurosif, 2018. The UN initiative of Principles for Responsible Investments, unpri.org supports the development of SRI standards and provides guidance for investors.
The ESG data market has experienced explosive growth and rapid succession of acquisitions in recent years. The rush to acquire companies that provide environmental, social and governance data continues as the COVID-19 pandemic brings corporate sustainability into sharper focus for companies and investors worldwide. The latest move in the space came April 21, when Morningstar Inc. announced that it was acquiring the 60% of Sustainalytics BV that it did not already own in a deal that values the Netherlands-based ratings and research group at about €170 million.
While the ESG data trend is hot now, for the S-Factor this is not a new phenomenon. This is an area where the Company has specialized as experts in the field for decades prior to launching its S-Factor data solution in March 2020. The S-Factor's impressive management team includes subject experts in environmental, health and safety, social impact measurement and management, certified fraud examiners, PhDs in data and brilliant developers – all working together to solve complex responsible-investment challenges.
What is unique about the S-Factor is that it provides the "social factor" information, or the "S in ESG" that is currently missing from the entirety of the ESG market. The S-Factor Solution is originated and structured from unstructured content, and is standardized to 45 internationally recognized frameworks, including the United Nations Principals for Responsible Investment (PRI) and the Sustainability Accounting Standards Board (SASB) which account for financially material ESG criteria.
S-Factor's proprietary taxonomy marries every social regulation, code, framework, indicator and convention in the world to a unified set of criteria, standardized definitions and automated ability to process information against it. The S-Factor leverages advances in natural-language processing, cognitive computing and machine learning to provide actionable and investable insights.
The pandemic has highlighted the world over the need to address social impact and accountability issues. This, compounded by the already burgeoning demand for ESG content moving into the mainstream marketplace, has contributed to the S-Factor's continued growth. It is this overwhelming demand which has led the Company to seek its final seed round of funding in order to expedite delivery of the S-Factor Solution to meet this demand and to increase the team, creating dozens of virtual positions in a sustainable, cloud-based, operational environment to match the surging demand for social data, while also seeking to implement continued product and technical improvements, including additional machine learning capabilities.
The S-Factor Co.'s current client base includes some of the world's largest household institutional asset managers, wealth management firms, credit agencies, private equity firms and insurance companies. Despite COVID-19-imposed delays, the S-Factor has built a track record of industry-wide recognition, earning the title of ESG Advocate of the Year at this year's Private Asset Management Awards in New York.