Satya Kamal Raparthi is the Founder and CEO of Daato. During this conversation, Satya discusses crossing the chasm, compliance AND performance, adaptable tech…and how fictional characters can be inspirational leaders too!
Daato was created to accompany organisations on their sustainability journey, from ensuring legislative compliance to setting, monitoring and achieving their strategic ESG targets. Their goal is to provide all the tools companies need to achieve ESG compliance and, move from compliance to taking actions to improve their sustainability performance.
1. What is Daato’s mission?
Our mission is to accelerate the ESG transformation. We believe that the business world is at a tipping point where non-financial reporting is becoming as formalised as financial reporting has been for some time. Given the societal needs and the changes we're seeing, this shift is crucial. Regulations were necessary to drive this change, and now that they're in place, the focus should shift from mere compliance to performance management. By helping businesses achieve compliance quickly, we enable them to start focusing on improving their ESG performance.
We stand by our mission statement to accelerate the ESG transformation for all businesses.
There are three main things that differentiate us.
First, as a solution and platform, we are adaptable. Unlike the large enterprise solutions from companies like SAP and Microsoft, which come with significant implementation and maintenance costs, our platform is designed to be both quick to deploy and flexible enough to adapt to your organisational processes. On the other hand, single-point solutions may excel at addressing a specific use case, but they often fall short of covering the full range of needs, leading to integration challenges. We offer the best of both worlds: a highly configurable platform that doesn't require extensive customisation, allowing you to get started quickly while still providing the flexibility to evolve with your needs.
Second, we offer depth in both process and domain. Most solutions in the market today are primarily focused on reporting, which is relatively straightforward—collecting, structuring, and visualising data.
However, ESG management requires much more than just reporting; it involves handling diverse data types like supplier data, accounting data, organisational data, and HR data.
Reporting, in the end, is just one of the outcomes. Our process-driven solutions simplify comprehensive ESG management and directly contribute to cost savings, whether through reduced audit costs or more efficient use of personnel time.
Finally, our strong emphasis on information security sets us apart from competition. Despite being a relatively young company, we have been ISO certified for over two years, which is rare in the software domain. This focus on security is particularly important for European businesses, where trust and compliance are critical. Our commitment to information security has earned us the trust of even the most conservative customers, which is key to our strong market adoption.
2. What have been the most significant milestones in Daato’s journey so far?
The first major milestone for us was back in December 2022. We began building the product in April 2022, initially focusing on being a reporting solution. However, by December, we realised that the market needed more than just a simple reporting tool. To gain a competitive advantage, we needed to do more. This led us to narrow down the number of frameworks we targeted, allowing us to dive deep into the major ones. This decision paid off, resulting in some of the strongest modules for ESRS, supply chain sustainability, carbon/emissions management, and the EU taxonomy. Bundling all this together has worked brilliantly for us. Shifting our focus to major frameworks, rather than being just a nimble reporting solution, was a game changer.
The second major milestone came toward the end of 2023 when we achieved proof of revenue. By early 2023, we had a solid product, but we also needed to demonstrate our value through revenue and attract further investment. This was what I would call our 'Crossing the Chasm' moment—a phase where many startups falter, but we successfully navigated it. We surpassed 1 million in sales, acquired over 25 customers, and secured significant funding. This set a strong foundation for 2024. As a typical SaaS business targeting T2D3 our goal is to triple our ARR from last year. In fact, our target for this year is to achieve a sixfold increase, and so far, we’re at 4x. We're optimistic about reaching the remaining 2x as well.
3. What do you look for in the perfect customer?
Our typical customers come from a wide range of industries. One of the key benefits of building a robust yet “configurable” platform is its versatility across different sectors.
While industries may have their own best practices, the underlying principle remains consistent—much like an accounting system that, while used differently across industries, operates on the same foundation and simply needs to be configurable.
Our customer base is diverse, including players from the automotive, manufacturing, shipping, logistics, dredging, and energy sectors. For example, in Germany, we have entities called "Stadtwerke",responsible for heating, electricity, and energy needs, as our customers. We also have customers in healthcare, agriculture, and other industries, which demonstrates that we are truly industry-agnostic.
However, when it comes to company size, we do have a sweet spot—typically companies with 500 to 10,000 employees. These companies face similar day-to-day challenges: they have complex organisational structures, but not a high volume of entities attributed to that complexity. This is where we excel, helping them get started quickly and achieve compliance efficiently. While this mid-sized market is our focus, we also serve larger enterprises with over 40,000 employees. So, while we're flexible, our strength lies in the mid-sized market.
4. What are the foundations of growing a great team?
This approach comes from lessons learned in the past. While it's easy to call for transparency, living up to it is much harder. One of our core values at Daato is candor. We believe in respectful disagreement and open communication. This extends to our relationships with customers, investors—what we discuss with them flows down to the team as well.
We're all in the same boat, and I believe that every crew member should know where we're headed.
We communicate everything clearly, whether it's positive or negative. If there's a storm ahead, we don't shy away from saying so—we acknowledge it and prepare ourselves to perform better. This open communication is central to how we operate at Daato. If I had to highlight one key aspect of our culture, it would be this. I'm quite happy with how we handle it, though I recognise that maintaining this as we grow will be challenging. But we're very conscious of this, and we'll do our best to uphold it.
5. How do you incorporate GenAI / advanced technologies, and what will be your next major digital innovation?
Certainly, a process management platform like Daato brings together solutions for a variety of technical challenges. Often, these challenges have already been solved—for instance, role-based access control, which doesn't need to be reinvented but just implemented correctly. The same applies to features like email management and notification management.
As a software engineer, I don't believe that one size fits all when it comes to technology; we need to find solutions that make sense from both a business and cost perspective.
That said, we do use generative AI in a limited capacity, primarily for automated or assisted generation of disclosure text. We collect a lot of data points using Daato, and then summarise and present this data in human-readable formats, statements and structures. Then we use generative AI to help generate these disclosure texts, which is a significant application for us. We also employ core software engineering concepts like semantic search and play with Redis clusters.
One of our strongest advantages is the way we orchestrate our infrastructure. Most companies at our stage, with a similar size and resources—around 30 people and 5 million in total funding—usually don't have the capacity to scale to, say, 500 clusters or instances of customers. But we do. We manage all of this with less than one full-time person because of the robust technology and infrastructure we've built. It's highly satisfying to see it in action – I am confident of our scaling capabilities.
We have two scopes of expansion. First, Daato is a modular platform, with a foundational structure that supports different modules and use cases. This flexibility allows our customers to pick and choose the modules they need, and we also have plans to add additional modules. For example, we have a new module called CBAM that's on the horizon.
The second scope of expansion is typically servicing the demands from the existing customers to improve product value. This can happen to software only once it reaches certain maturity and we have been spending a lot of our 2024 with this sort of expansion.
6. What’s the vision for Daato? What does great look like in three to five years’ time?
I can proudly say that our vision has remained consistent since our inception – “enable businesses to enhance their ESG performance year”. While we've made some adjustments to the product, our vision has never wavered. From the beginning, our goal has been to encourage companies to focus on holistic ESG performance rather than just compliance.
Compliance is often viewed as a cost issue, but performance management and improvement directly impact profitability, influencing factors like the cost of credit, investor attractiveness, and overall financial performance.
We aim to guide businesses on a journey from compliance to performance, helping them continuously improve their ESG outcomes. I reiterate, our vision is to enable businesses to enhance their ESG performance year after year.
7. What are you doing that is good for the planet?
That’s the core reason behind our efforts, but we’re approaching it in a more business-oriented and pragmatic way. We believe that business organisations have a significant role to play in making a positive impact, both directly and indirectly. Our goal is to encourage them to shift their focus from viewing ESG as merely a compliance issue to actively engaging in performance management and we do our best to position this perspective to the business owners.
INSTANT INSPIRATION
1. What is your favourite book/blog?
It's a short book titled A Short History of the World in 50 Lies. It explores significant events, some even thousands of years old, that have reshaped history of humankind. These pivotal moments often involve deception or misunderstandings that could have altered the course of history. As you read the book, you might realise that our current lives are, in a way, the result of these past deceptions, lies, continuing to influence how we live today. It's a
2. Who is your favourite inspirational leader?
I have a fictional leader who inspires me. The character is Jack Aubrey, the protagonist from the movie Master and Commander, which is also based on a book. He's a big source of inspiration for me.
3. What is your favourite piece of technology?
Language processors. Most people might think of natural language processors, but I'm referring to a different kind—a fundamental type of language processor that operates at the core level of every computer. The invention of these processors is crucial, and the field is still evolving. While it might seem like a dry subject to many, it's something I'm deeply fascinated by.
4. What is your favourite cocktail or guilty pleasure?
I would just go with Mojitos on a warm day by the beach. This would transition to a Pegu Club in winters.
5. What is your favourite way to celebrate success?
Well, I usually celebrate with loved ones, often by going to a nice restaurant to mark the occasion. I also like to buy a plant as a way to commemorate it. I wouldn’t say I’ve had too many big successes, or at least my standard of success is a bit different. But when I do celebrate, it typically involves dining and enjoying some drinks. For the bigger milestones, I always try to buy a plant.
KEY TAKEAWAYS
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ESG Transformation is Crucial: The business world is at a pivotal moment where non-financial reporting, particularly in Environmental, Social, and Governance (ESG), is becoming as standardised as financial reporting. This shift is essential for societal progress, driven by regulations that require businesses to focus beyond compliance and aim for performance management.
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Beyond Reporting—Comprehensive ESG Management: Effective ESG management goes beyond simple data reporting. It involves handling diverse data types across various domains, such as supplier, accounting, and HR data. Comprehensive process-driven solutions are necessary to achieve real cost savings and improve operational efficiency.
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Diverse Customer Needs: ESG solutions need to be versatile and applicable across various industries. While industries have specific needs, the underlying principles of ESG management remain consistent, necessitating configurable platforms that can be tailored to different sectors without losing effectiveness.
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Building a Transparent and Collaborative Team: Transparency and open communication are foundational to building a successful team. Emphasising candor and respectful disagreement helps foster a culture where everyone is aligned and informed, which is crucial for sustaining growth and navigating challenges.
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Adaptable and Cost-Effective Solutions: There is a growing need for ESG platforms that are both adaptable and cost-effective. Unlike large enterprise solutions that are costly and rigid, businesses benefit from platforms that can be quickly deployed and customised to meet diverse organisational needs without requiring extensive customisation.
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Information Security is Critical: In the context of ESG management, information security is a key differentiator. Companies that prioritise robust information security measures can gain the trust of even the most conservative clients, which is especially important in regions like Europe where compliance and trust are paramount.
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The Role of Advanced Technologies: The integration of advanced technologies, such as generative AI for automating disclosure text and semantic search for data management, is becoming increasingly important in ESG management. Companies that can effectively orchestrate their infrastructure and scale operations efficiently will have a competitive edge in the market.
About Daato
Daato was created to accompany organisations on their sustainability journey, from ensuring legislative compliance to setting, monitoring and achieving their strategic ESG targets. Their goal is to provide all the tools companies need to move from compliance to taking actions to improve their sustainability performance.
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