Carbon credit insurer CarbonPool raises $12m in seed round

Zurich-based startup CarbonPool provides credit insurance with claims payments made in-kind, ensuring companies can guarantee the carbon credits that they buy materialise. The secured funds of CHF 10.5 million ($12 million) will support the company in becoming the world’s first insurance company with a carbon credit balance sheet.

Almost half of the world’s top 2,000 companies have plans to hit net zero emissions by 2030, part of an accelerating effort to achieve the Paris Agreement’s goal of global net zero by 2050. Many of these companies, alongside thousands of others, depend on carbon credits to reach their net zero goals. But after considerable turbulence in carbon credit markets, credit integrity, proper risk underwriting and certainty of outcomes are critical to reassure investors, regulators, and other stakeholders that these promises represent real environmental gains.

CarbonPool, incorporated in 2023 by former Allianz executives Coenraad Vrolijk, Nandini Wilcke and Frederic Olbert, aims to accelerate investment in carbon credits by providing carbon credit insurance with claims payments made in-kind. This form of insurance covers the failure to achieve net zero commitments due to shortfalls, reversals, business interruptions, and natural catastrophes that either reduce the amount of carbon dioxide removal contracted for or unintentionally add carbon dioxide back into the atmosphere. Its target customers are corporate investors, fund managers or project managers seeking to de-risk their carbon investments and accelerate the transition to net zero.

“CarbonPool’s in-kind payments make it unique among insurers in not only offering protection to holders of carbon credits in cases of natural disaster or technology breakdown but also in providing a guarantee that carbon credits live up to their promises, giving purchasers certainty and ensuring that they can meet their net zero goals,” said Coenraad Vrolijk, former regional CEO of Allianz Africa and CarbonPool’s co-founder and chief executive.

The freshly obtained funds will help the startup accelerate its mission of becoming the first company to underwrite the carbon credit markets, with carbon credits and not cash. The financing round was co-led by Heartcore Capital and Vorwerk Ventures and included HCS Capital, Revent Ventures and former members of the management board of insurance giant, Allianz, Axel Theis and Christof Mascher.

(Press release/RAN)