VCs are betting on these startups to combat carbon emissions

On Apr 5, 2022

Against a backdrop of dire warnings from top climate scientists, venture capital is flowing into a growing cadre of startups that target the reduction and removal of carbon dioxide from the atmosphere.

Climeworks has raised a $650 million round led by Partners Group and GIC in the largest VC carbon tech deal to date, according to PitchBook data. Last year, the company launched its first carbon capture and storage plant, which scrubs carbon dioxide from the air and stores it underground.

Also this week, Sweep landed $73 million to help companies reduce their emissions, and PE-backed ClimeCo raised over $50 million for its carbon abatement platform. The companies represent another side of the carbon tech stack that is building software to account for and manage emissions.

Climate experts frequently caution against relying on unproven carbon capture technology, emphasizing the need to aggressively cut emissions today. At the same time, some amount of carbon dioxide removal will likely be necessary to offset unavoidable emissions, according to a United Nations climate report released this week.

Climeworks’ direct air capture approach is among the more ambitious methods taken by carbon capture startups, which are also exploring nature-based solutions involving everything from seaweed farms to tree planting. Like nuclear fusion reactors, another frequent target of big VC bets, carbon capture is seen by many as a potential game-changer for combating global warming.