Former WeWork co-founder and CEO Adam Neumann is back.
The controversial CEO is now the founder of a carbon credit startup called Flowcarbon, in which he is also an investor. The new company raised a $70 million Series A from high-profile VCs such as Andreesen Horowitz (a16z), General Catalyst, and Samsung Next.
Flowcarbon is a blockchain-based company intermediating in the voluntary carbon markets. The company will issue a carbon-backed token called the Goddess Nature Token (GNT), which is “backed by a bundle of certified credits issued over the last five years from nature-based projects.” Its goal is to offer exposure to “corporate-quality credits.” Investors can either buy GNT to retire the credit, use it in DeFi applications, or “redeem” it for an underlying real-world credit. Alternatively, they could hold onto GNT as an investment.
The medium of “carbon credit investing” has been on the rise in recent months as the demand for voluntary carbon markets heat up. Carbon markets are a lesser-known, opaque marketplace where corporates purchase credits from non-profit or non-governmental organizations which are removing carbon from the atmosphere. A single credit is issued each year to the organization representing projects which avert the creation of one metric ton of carbon.
However, there are only so many projects being accredited for their carbon-removing activities. When investors participate in the market by buying these credits, either to retire them or speculate on them, they reduce the supply of them — and that leads to more expensive acquisition costs on the credits for corporations.
On the blockchain, crypto investors have been getting a piece of the action for over a year already — KlimaDAO, Toucan, Universal Carbon (UPCO2), and other carbon credit-based DAOs and protocols have tokenized carbon credits and developed new technology to allow for bridging carbon credits onto the blockchain. We’ll touch on their impacts on-chain in a future edition of The Litepaper.
Carbon credits might not be without their pitfalls, though. There are many issuers of credits, many different styles of credits, little regulation, and very little transparency in the marketplace. They have also been assailed as assigning a profit-motive to resolving climate change, and been described as a license to pollute by left-leaning opponents.
These pitfalls might be best explained by The Nature Conservatory‘s decision to investigate the authenticity of 20 projects which they sold carbon credits for. There have been no additional updates about their investigation, but the organization is known to sell credits to JPMorgan, Disney, and Delta, among others.
The world’s largest carbon issuer might have its own problems, too: it announced today that it would “prohibit the practice of creating instruments or tokens based on retired credits, on the basis that the act of retirement is widely understood to refer to the consumption of the credit’s environmental benefit.” This act is likely to affect existing blockchain-based carbon protocols.
However, it’s unlikely to do much to Neumann and his friends at Flowcarbon. After all, the way their press release reads, they’re going long on carbon as an investment vehicle — and building infrastructure which could realign the balance of power in carbon markets on-chain.
Before Flowcarbon’s big raise, Flowcarbon reportedly made $10 million in sales last year.
Neumann spent a healthy portion of the pandemic amassing a portfolio of apartments. Adam has not elaborated what he plans to do with his billion-dollar portfolio of apartments, but he said that “the opportunity is tremendous,” in an interview with Financial Times.
He also indicated, in the same interview, that he began “buying forests near the equator” and that he bought forestland which was “more than a few times the size of New Jersey.”
Obviously, WeWork made Neumann very wealthy. However, WeWork can’t say about Neumann. The ambitious Softbank-backed startup once towered at a $47 billion valuation. Today, it’s worth less than $5 billion.