Microsoft’s sweeping pledge to remove more planet-warming carbon from the atmosphere than it emits has the tech world buzzing about “carbon removal.” A Seattle startup just raised cash to take that concept to a new level.
Nori operates a blockchain-based marketplace with its own cryptocurrency tokens to allow corporations, governments and individuals to fund efforts to reduce levels of carbon dioxide in the air. It just raised $1.3 million in a “pre-seed” round to continue this push.
The cryptocurrency would pay farmers to capture the gas by using sustainable farming techniques that promote the growth of microbes and bacteria in topsoil. The microscopic organisms pull CO2 out of the air and hold it in the ground where it won’t heat the planet.
Nori’s cash infusion will fund operations through the middle of the year, CEO Paul Gambill told GeekWire. The startup plans to raise an additional $5 million from venture capital firms in the next few months to expand its 10-person team. The company faces more demand than it can handle right now, Gambill said, hence the need to boost headcount.
Carbon removal prices are mostly decided by government regulation, rather than the market, Gambill said. Nori wants to create incentives to bring more people into the fight against climate change.
“If we want people to do something that is going to pull carbon out of the air, the simplest way to get them to do it is to pay them,” Gambill said.
Nori, a graduate of the Techstars Sustainability Accelerator, just launched its marketplace late last year. The platform runs on cash/credit payments, but the company plans to start selling its tokens this quarter. Nori makes money by charging a transaction fee to the people and companies funding the sustainable farming efforts.
Nori eschewed traditional equity investment to fuel its growth in favor of Simple Agreements for Future Tokens, otherwise known as a SAFT. Investors commit cash to the startup in exchange for the guarantee of future tokens in an initial coin offering.
The value of a token is tied to the market price for a ton of carbon removed from the atmosphere. Right now, the cash value of a single token, which pays for one ton of carbon removal, is about $15.
Nori gives investors access to discounted tokens that they can sell for a higher return or use to offset their own emissions. Employees will also get tokens as incentives.
“We all have skin in the game, and this way everyone benefits when the value of a token increases,” Gambill said.
Gambill spent nearly three years at consulting giant Deloitte as a software product manager building apps for big brands such as Target, Nike, Starbucks and more. He went on to become a founder of two startups: iMessage sticker design company You Enjoy My Stickers and Happy Crate, a cannabis subscription service.
Gambill settled on climate change after reading about the frustrations of scientists unable to get people to listen to their warnings about the dire consequences of the phenomenon.
Through the Carbon Removal Seattle meetup group he hooked up with his first co-founder: Christoph Jospe, then a chief strategist for the Center for Negative Carbon Emissions at Gambill’s alma mater, Arizona State University. Klaus Lackner, director of the emissions center at ASU, is on Nori’s board.
Gambill applauded Microsoft’s efforts to become “carbon negative” by 2030, removing more carbon from the environment than it emits each year. Even more impressive, he said, is Microsoft’s goal of removing enough carbon by 2050 to make up for all of its emissions and electrical consumption since its founding decades ago.
Gambill sees the move as a validation of Nori’s business model and a sign that the world is embracing carbon removal.
“Carbon dioxide emissions are like garbage we’re throwing out on the street, and Microsoft is saying they want to pick up all their garbage, recycle what they can, and dispose responsibly of the rest,” Gambill said. “That’s fantastic leadership, and I expect to see more companies pushed by their employees and shareholders to follow suit.”