Covering Disruptive Technology Powering Business in The Digital Age

The real estate sector is a significant contributor to global carbon emissions, responsible for nearly 40% of the world’s greenhouse gas emissions. In light of mounting environmental concerns and stringent climate goals set by international agreements and governmental policies, the industry faces unprecedented pressure to undergo transformative changes. Addressing this urgent need is Accacia, a pioneering startup leveraging Artificial Intelligence (AI) and Software-as-a-Service (SaaS) technology to revolutionise global real estate decarbonisation.

The real estate sector is observably shifting toward sustainability, driven by the imperative to limit global warming to 1.5˚C above pre-industrial levels by 2050. Higher carbon prices and stricter building standards are compelling investors to prioritise sustainable assets, marking a fundamental change in market preferences. Beyond compliance-driven initiatives, this shift reflects a significant evolution in market sentiment, as investors are increasingly prioritising greener, energy-efficient properties.

“Climate risk is becoming a must-have metric for investors. While real estate is one of the single largest contributors to GHG emissions, it is also a very hard-to-decarbonise sector given the complexity of value chain emissions—construction vs operations—and the variety of asset uses. Given our deep interest in climate, we were confident that the sector demanded a custom solution designed for the nuances of the real estate sector,” said Helen Wong, Managing Partner at AC Ventures.

Accacia Seizes a Massive Opportunity

Decarbonisation of real estate is one the biggest opportunities today—with a staggering US$18 trillion of investment required over the next decade to achieve net-zero emissions. Annu Talreja, Co-Founder of and CEO at Accacia, recognised the critical need and immense opportunity for decarbonization in the global real estate industry. The company was built to address these needs by seamlessly integrating with existing systems and providing comprehensive solutions for tracking and reducing emissions.

When asked about why there is a global need for tools like Accacia, Annu explained that real estate is inherently a complex business, with many moving parts. As such, it already requires many specialised ERP tools and SaaS solutions. By integrating with existing systems already used by the world’s largest property owners, Accacia helps them do a variety of important things.

These include measuring Scope 1, 2, and 3 emissions from asset operations, assessing and improving building designs for embodied carbon, calculating financed emissions for their investment portfolios, setting net-zero targets, tracking their decarbonization journeys, and more.

Annu shared that the global estimated carbon accounting software market currently stands at USD $15 billion and is expected to grow to USD $50 billion in a few years. Meanwhile, the green building market is valued at approximately USD $25 trillion in developing regions. In developed nations, the market for retrofits (upgrading existing buildings for enhanced energy efficiency and decarbonisation) is somewhere between USD $18 trillion and USD $20 trillion.

“At its core, our product is a carbon emissions tracking platform. But it goes beyond mere tracking to facilitate actual decarbonisation. By doing so, it also opens the door to a vast market of retrofit solutions, advanced technologies, and innovative materials within the real estate industry,” explained Annu.

The company’s founding team includes Jagmohan Gaarg, Accacia’s sales lead who worked with Annu previously at Oxfordcaps, a tech-enabled student housing business that she built and scaled to USD $20 million in annual recurring revenue. Accacia’s Co-Founder and CTO Piyush Chitkara was a technical consultant for Oxfordcaps. He now comes to the table with senior experience from major tech outfits like Cisco, Rakuten Mobile, and others.

Accacia launched in 2022 and spent the better part of a year experimenting in pursuit of product-market fit. After research and product development, the startup raised its first round of capital in December of that year. The following January, the team began onboarding its first paid clients to the platform.

Highlighting some large early customers, Annu said, “Within the first year, we managed to sign some big enterprise clients, including Hines, which has about USD $100 billion in AUM. It is one of the top five real estate asset managers globally. We also signed JSW Group which has more than USD $20 billion in AUM and is one of the largest conglomerates based out of India. As a multinational, they are into all core sectors, including cement, steel, infrastructure, and more.”

Beyond sales, the company has also achieved notable milestones that underscore its growing influence and success. Among these, securing the Global Real Estate Sustainability Benchmark (GRESB) accreditation stands out as a prominent badge.

Annu explained, “GRESB is the largest ESG reporting platform for all large real estate companies. Globally, they report via GRESB and rely on its ratings for their ESG rankings. We became the first product company from Asia to get that.”

The Evolving Green Real Estate Market and the Go-to-Market Strategy

When asked about Accacia’s go-to-market strategy, Annu said that in Southeast Asia, one key play has been not only looking at local building assets but also targeting local asset managers, many of whom have real estate assets globally.

She said, “Specifically when it comes to locations in Asia like Singapore, Dubai, or Abu Dhabi, we have some really large asset managers like Temasek GIC, CapitaLand, Keppel, Adia, and others. There are some really large global asset managers here and that’s why Singapore is a very important market for us.”

Accacia’s founding team

Annu pointed out the changes in worldwide regulatory practices, specifically mentioning how the Singaporean government recently broadened its regulations. These updated rules now mandate that industries previously viewed as non-essential, such as the real estate sector, must now report their direct and indirect emissions.

“Also, we are seeing a lot of development, especially in more developed geographies in Asia, like Singapore, Japan, and Korea seeing 10% to 25% rental premiums being drawn in green buildings as opposed to non-green buildings. So, in all, both the quickly evolving regulatory landscape as well as the demand from the real estate client perspective has been very encouraging for us.”

The company recently closed a USD $6.5 million pre-series A funding round led by Illuminate Financial, with participation from AC Ventures, signaling investor confidence in the company’s mission and capabilities. The funding comes at a critical juncture as regulatory bodies worldwide intensify their focus on carbon emissions reporting, highlighting the urgent need for Accacia’s innovative solutions.

Looking ahead, Accacia aims to develop further its decarbonisation planning engine to provide clients with tailored solutions for optimizing energy consumption and reducing carbon emissions. With plans to expand into North America and forge strategic partnerships with major clients, Accacia is poised to lead the charge in driving sustainable practices across the real estate industry.

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