Funds are flowing to startups working on carbon capture solutions.
The money lining up to fund early-stage carbon removal approaches is adding up quickly. Literally hours after tech firms Stripe, Shopify and company trumpeted the creation of their nearly $1 billion fund for startups focused on carbon capture and storage, Chris Sacca’s climate tech venture capital firm Lowercarbon Capital revealed it has created a $350 million fund focused exclusively on the category.
He describes the innovation around this space as “bonkers” and the pace “blistering.” And that’s got the legendary, maverick investor behind Stripe, Twitter and Uber pretty worked up. The effort will be run by Ryan Orbuch, one of the teams who helped get Stripe’s own removal fund off the ground a couple of years ago. Oh, and not-too-coincidentally Stripe is one of the investors, to boot. The fund’s focus will be not just on the cleanup of CO2, but on ways to keep the excess CO2 polluting the atmosphere more permanently. As Sacca writes on the firm’s blog:
“Removal means removal. It means mopping up the 170 years of extractive sludge milk we’ve already spilled. Removal means we grab CO2 pollution already out there and sock it away permanently. As it has been described quite eloquently by others: When you only have one swimming pool, you gotta fish out the turds already floating around while simultaneously convincing people to stop dropping new turds.”
Effective imagery, right? But let’s wind it back to the thing that’s got me really intrigued these days: How excess CO2 is socked away. And, just as important, what value those who are capturing these emissions might be able to generate in the process.
This brings me to the news that Air Company, which uses CO2 to create “carbon-negative” alcohols (vodka) and consumer products (hand sanitizer and perfume), has closed a $30 million Series A round led by Carbon Direct Capital Management along with Toyota Ventures, JetBlue Technology Ventures and Parley for the Oceans. The infusion brings the total money behind the Brooklyn, New York venture to $40 million.
“Removal means removal. It means mopping up the 170 years of extractive sludge milk we’ve already spilled.”
The funds will go toward building Air Company’s third factory, which will be used to help scale up the startup’s work on ethanol and other fuels made from CO2. “Air Company is pioneering carbon utilization technology that has the potential to reshape consumer industries in the short term and specialty chemicals and fuels in the long term,” said Jonathan Goldberg, CEO of Carbon Direct, in a statement.
The CO2 used by Air Company is captured from “traditional fermentation and industrial alcohol plants,” processed and liquified, and then shipped to the company’s facilities to be turned into its products. The electricity used to power its production in Brooklyn is sourced 91% from wind resources and 9% from solar, according to the company’s website.
Air Company is far from the only carbon tech concern focused less on the process of capture and more on how captured CO2 can be used in materials. A number of others focused on this opportunity were among the 60 startups recognized this week with milestone awards as part of Elon Musk’s $100 million Carbon Removal XPrize. An example: SkyNano, which is working on advanced materials that could be part of batteries, tires and other items. One other company finding real commercial traction is DyeCoo, which uses reclaimed CO2 to dye textiles, eliminating water and chemicals from the process. It has some powerful customers (Nike and Adidas) and partners (DuPont Biomaterials).
As the broader carbon tech matures, I’m excited to see what some call the “carbon to value” subsegment grow, particularly in the materials space. Know of any great business-to-business startups that fit that description? Connect with me on LinkedIn.
This article originally appeared on GreenBiz.com as part of our partnership with GreenBiz Group, a media and events company that accelerates the just transition to a clean economy.
