Carbon removal's gold rush
Carbon removal is climate tech's hottest topic, and investors have allocated more than $1 billion to the industry in the past week alone.
Why it matters: As Axios reported Wednesday, putting a dollar amount on any market sends a strong signal to entrepreneurs and investors. But pricing a market this large this quickly adds an element of urgency investors and entrepreneurs can't ignore.
Driving the news: Chris Sacca's Lowercarbon Capital announced on Thursday a $350 million fund wholly dedicated to backing carbon removal startups.
- Tuesday, a consortium of tech juggernauts led by payments company Stripe announced Frontier, a $925 million joint fund to finance customer agreements with carbon removal startups.
- Of note, Frontier is not making equity investments in startups, Stripe head of climate Nan Ransohoff tells Axios.
- Climate investing is a small world. Ryan Orbuch is leading Lowercarbon's new fund after joining the VC firm from Stripe, and Stripe invested in Lowercarbon's new fund.
Between the lines: These efforts are tackling the industry from two sides — as potential buyers of the technology and as early-stage investors.
- Both strategies are aimed at helping nascent technologies scale, albeit with countering methods.
State of play: Private companies are playing a primary role in addressing the climate crisis, and where there are business opportunities, there are venture-backed upstarts.
- Many modern technical advancements have emerged from corporations. Lowercarbon and Stripe are betting that the same is true of carbon removal technology.
- The U.S. Department of Energy hasn't been on the sidelines either, with funding pushes through ARPA-E and other federal programs. Congress also allocated an additional $3.5 billion for carbon storage and capture through the bipartisan infrastructure bill.
- Experts maintain that the tech is still largely unproven and it is too early to tell which approaches have the potential to work at a global scale.
The bottom line: As Orbuch said on Twitter Thursday, "There's never been a better time to start a carbon removal company!"