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Investors split on direct air capture tech

Mar 21, 2022
Illustration of a mason jar with carbon dioxide molecules captured inside.

Illustration: Gabriella Turrisi/Axios

Big names in climate VC went all-in on Heirloom, a direct air capture startup based in San Francisco, with a $53 million Series A investment.

Why it matters: The round stands out because the direct air capture debate among investors continues unabated.

  • Bill Gates' firm Breakthrough Energy Ventures co-led the round with Carbon Direct Capital Management and Ahren Innovation Capital.
  • Chris Sacca’s Lowercarbon Capital, Breyer Capital, Marc Benioff’s TIME Ventures, Nicole Shanahan, the Grantham Environmental Trust and Seven Seven Six also participated in the round.

What they're saying: Skeptics argue that the science is still out on how to effectively capture carbon dioxide from the air, and others have gone as far as saying they wouldn't invest in any current direct air capture startups.

  • "There's also a class of tech we don't know how to do yet, and I put direct air capture in that category. We know what it should look like to invest and we are speaking to researchers around the world on such things, but we are not there yet," Playground Global co-founder and general partner Peter Barrett tells Axios.

The other side: More bullish investors maintain that not enough investment has gone into direct air capture startups, leading to a delay in scientific advancements that can underlie successful companies.

The bottom line: Other capital-intensive industries, like biotech, have weathered similar debates over cutting edge technologies like CRISPR. In many cases, the jury is still out on many practical applications, but investors are steadily growing more bullish on the tech overall.

Be smart: Only time will tell if throwing money at direct air capture can overcome its current scientific limitations.

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