The $3 billion voluntary carbon market may have risen at a compound annual growth rate (CAGR) of 30 per cent over the past eight years, but the sector is still weighed down by bureaucratic challenges with setting up and getting credits issued taking up to 36 months for project developers.
And buyer beware - when you purchase carbon credits it isn't easy to assess their quality either.
Sydney-headquartered CarbonHQ aims to tackle these dual problems around efficiency and transparency, and has just raised $600,000 in pre-seed funding to further its development of a digital platform to process on-ground data, automate issuance workflows and establish a direct link between credits and their underlying data.
The round secured backing from Australian venture capital funds Galileo Ventures and Investible.
Much like capital works project management dashboard provider Mastt, another Investible-backed company, CarbonHQ is all about killing spreadsheets in its chosen field; in this case carbon project development, which relies heavily on more archaic digital tools like Excel, PDFs and e-mail.
Co-founded by Allen Fan and Eugene Datsky, CarbonHQ is already working with leading firms to help combat climate change and this funding is expected to further fuel its market expansion and team growth.
Since releasing its beta platform mid-2023, CarbonHQ has run trial projects with leading carbon project developers globally, and won a Carbon Market Digital Innovation Challenge organised by the UNCDF and Clean Cooking Alliance.
"Carbon projects need to be more efficient and transparent to play a bigger role in fighting against climate change. We are thrilled to be backed by Galileo Ventures and Investible as we take on this challenge. Their support will allow us to deliver some pretty exciting solutions for our customers," says Fan, who was an investment manager at a global leading carbon project developer
"Over the course of my career, I’ve seen how technology completely transformed industries and I’m confident that the carbon market is on the cusp of major digital advancements. I’m excited to be working with like-minded investors to drive positive change for carbon projects," adds Datsky, who has led engineering teams at a number of technology companies including Canva and Jetbrains.
Galileo Ventures partner James Alexander says that today, more than ever, we need to increase the effectiveness and integrity of carbon markets.
"We’re excited to back the CarbonHQ team to build the all-in-one platform for project managers and developers," Alexander says.
Investible launched its Climate Tech Fund in 2021 and the portfolio is now quite extensive, including food waste diversion platform Yume, Novalith Technologies which aims to make extracting lithium a cleaner process for the environment, and insect-based waste processing tech company Goterra, among others.
Investible investment manager Ben Lindsay says that in running this fund, his team sees 'loads of investment opportunities' looking to solve problems in carbon project development, but CarbonHQ's platform stood out as a 'powerful tool that helps address the pain-staking process of manually tracking carbon projects in complex spreadsheets'.
"Instead, the company is enabling customers to forecast and track impact directly and efficiently with a unique blend of technical insight and product vision," he says.
"Combining Allen's experience in carbon project development and Eugene's technical know-how, we believe CarbonHQ are a winning team."
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