Supercritical, the carbon removal market aimed (for now) primarily at tech companies that want to hit “net zero,” has raised a $13 million Series A funding round, led by Lightspeed Venture Partners.
The round includes funding from RTP Global, Greencode Ventures, MMC Ventures and others. We covered the launch of Supercritical in August 2021, when it was pointed out that the carbon footprint of the technology sector – which is embarrassing – proved to be greater than the entire aviation industry.
The startup combines business demand for carbon removal technologies. So in the same scenario as Tesla starting with an electric sports car so that it eventually launches a family saloon, Supercritical gives companies access to these new technologies that have the potential to grow even more yet to plant some forests etc., allowing it to be new. wave of carbon removers to rise.
The Supercritical market allows companies to purchase so-called “fully vetted and qualified” carbon removal credits, at the industry standard Science Based Targets (SBTi) level.
The funding will be used to scale its offering to tech companies, but, as co-founder and CEO Michelle You told me: “We continue to focus on tech companies but will also use the funding to expand offer. Every company in the world needs to get to net zero emissions if we stay below 1.5C of warming. There is no way to get to net zero without buying permanent carbon removal to get the rest emissions.”
Clients for Supercritical’s approach include banking platform Tide, algorithmic trading firm XTX Markets, as well as Verriff, Multiverse and IMC.
He pointed out that there is momentum in the market: “A third of the global market cap has made a voluntary commitment to net zero through the Science Based Targets initiative. Every single business needs to purchase permanent carbon removal so the opportunity to scale CDR by serving other verticals is huge.
Carbon dioxide removal (CDR) refers to methods that remove carbon dioxide (CO2) from the atmosphere. The alternative, carbon offsets, has often been found to be ineffective at best, and even fraudulent at worst.
In June an investigation by the Guardian newspaper, the German weekly Die Zeit and SourceMaterial, found that more than 90% of the rainforest carbon offsets of the largest global certifier, Verra, were allegedly worthless.
In contrast, Carbon Dioxide Removal (CDR) offsets are the only globally recognized offsets that count toward net zero, by actually removing carbon from the atmosphere and storing it permanently.
However, CDR’s capacity has been disappointing so far, to put it mildly. The Intergovernmental Panel on Climate Change (IPCC) found that only about 600,000 tonnes of CDR have been purchased by 2022 – less than 0.01% of the 10 gigatonnes we need to remove from the atmosphere each year by 2050.
As a market, Supercritical says it focuses on “high-quality, vetted, sustainable CDR projects,” including biochar, direct air capture (DAC) and improved weatherization, as well as afforestation. Because it combines demand from buyers, Supercritical says it acts as a market-maker, which means that CDR projects can go up. It also buys from cutting-edge climate startups (see Tesla analogy above) with new CO sequestering techniques2.
Last May, Supercritical entered into a long-term agreement with Carbo Culture, a startup that converts carbon-containing biomass into biochar on a commercial scale. In 2021, Carbo Culture raised $6.2 million in a seed financing round led by Silicon Valley VC True Ventures.
In a statement, Paul Murphy, partner at Lightspeed Venture Partners, said: “Supercritical is doing something unique. By focusing exclusively on carbon offsets, they help businesses invest in places that can really make an impact on the climate as they work together to decarbonize.
Supercritical is backed by Lightspeed Venture Partners, GreenCode Ventures and MMC Ventures. It was previously backed by LocalGlobe and angel investors including Peter Reinhardt (Twilio Segment and Charm Industrial), Yancey Strickler (Kickstarter), Alice Bentinck (Entrepreneur First), Gustaf Alströmer (Y Combinator) and Evelyn Bourke (Bupa).
The market for startups that take a market or a market-making approach is heating up. In May, I reported on climate startup CUR8, which raised $6.5 million from GV for its market-making platform for carbon removal. While Supercritical both markets and sells carbon accounting and removals, CUR8 focuses solely on removals and driving demand and access to finance for suppliers.
The fact that these two startups came out of the UK is also a testament to the fact that the UK is seen as an international leader in carbon pricing and regulation.
