The Carbon Footprint Market is a Billion Dollar Opportunity
This market analysis on the carbon tracking market dives into the problems, the players in the space, and shares five predictions for 2030.
Atlanta Ventures is excited about software solutions to track and offset carbon emissions. If you are as excited about the space, we would love to hear your thoughts and build with you!
Solutions to end climate change have been broad — yet tied to a single goal — reduce carbon emissions.
In 2020, Chipotle began tracking the environmental impact of your burrito order — other companies are following suit.
The main players in reducing emissions are →
Corporations — Facebook, Google, Amazon, Microsoft, British Airways, and 200 other companies have pledged net zero emissions by 2040
Governments — At least 40 countries currently have mandatory emissions reporting programs in place — It’s only a matter of time before other countries implement mandatory reporting.
Individuals — Data shows that individuals care — Fast Company found that 75 percent of Millennials would take a pay cut to work at an environmentally sustainable company.
Carbon Tracking and Reporting has a massive data availability problem.
Accurately tracking emissions is complicated due to a lack of standardized metrics. Most companies have been using excel sheets to measure carbon footprint, which is largely inaccurate and outdated.
Current tracking systems are manual. For individuals, apps ask questions like do you eat meat? how much? Do you drive or bike? How often do you travel? Based on these questions, apps provide an estimate of CO2 emissions —the numbers are often largely inaccurate.
Variety of Opportunities to use software to tackle this at the individual and enterprise level →
• Using Software to track carbon emissions (supply chain, manufacturing, transportation, electricity, agriculture)
• Purchasing Carbon Offsets and tracking impact (Paying through an app to plant a number of trees based on offset goal)
• Seeing the impact of emissions due to purchases (tracking overconsumption of clothing, and individual products)
• Implementing devices in residential properties to track and manage emissions (natural gas stoves, electricity and lighting, and waste)
• Measuring the impact of carbon offset projects (how do we verify carbon offset purchases are executed?)
The Carbon Footprint management market was valued at $10.9 billion in 2020, and is projected to grow to $19.8 billion by 2026.
Government Regulation and Carbon markets have introduced a new industry standard — There is now a major market for startups to innovate solutions to track, reduce and offset emissions.
Startups tackling SaaS based tracking and reporting →
• Watershed (San Francisco, CA)— SaaS platform to measure, reduce, remove and report emissions — (Series B — $70M in Funding)
• Persefoni (Arizona) — Climate disclosure, carbon accounting, & carbon management — majority of customers are consulting and private equity firms. (Series B — $114.2M in Funding)
• Sweep (France) — Reducing carbon emissions in your business’ value chain (Series B — $99.9M Funding)
• Emitwise (London) — The carbon management platform for manufacturers and their supply chains (Series A — $16.6M in Funding)
• Plan A (Berlin) — SaaS-based data-driven carbon emissions tracking (Series A — $15M in Funding)
• SINAI Technologies (San Francisco, CA) — Enterprise software to measure, analyze, price & reduce emissions across industries (Seed — $14M in Funding)
• Planetly (Berlin) — Analytics to understand, reduce and offset carbon emissions (Acquired by OneTrust)
Startups building membership communities for organizations to achieve Net-Zero goals →
• Climate Club (New York) — Carbon reduction platform targetting employees, teams, and departments. (Seed $6.5M)
• Kindred (New York) — Professional network built to prepare executives for the future of socially responsible business (Seed — $8.2M in Funding)
Apps are enabling consumers to track their carbon footprint and purchase offsets →
• Wren (San Jose) — Monthly subscription to offset your carbon footprint (Seed — $8.2M in Funding)
• Klima (Berlin) — Allows individuals to understand their carbon footprint and purchase carbon offsets via an app (Series A — $15.8M)
• Joro (Oakland) — App that tracks the users’ carbon footprint and develops a climate action practice (Series A — $13.5M)
Retailers are integrating Carbon Removal API’s into their checkout systems →
• Cloverly (Atlanta)— API for Marketplace for Carbon Removals (Seed —$ 2.1M in Funding)
• Patch (San Francisco) — Building infrastructure for a climate-positive economy, starting with an API for carbon removal (Series B — $81M in Funding)
• Vaayu (Berlin)— Carbon tracking for retailers (Seed — $13.1M in Funding)
• Squake Earth (Berlin)—API-based solution powers accurate carbon calculations and provides tangible compensation of all travel and transport-related emissions. (Seed)
• Nori (Seattle)—Crypto carbon removal marketplace (Series A)
Climate-tech startups raised 53.7 billion from venture capital and private equity
-According to PwC, from 2020–2021, 65% of venture dollars went to climate tech start-ups in the US.
-Carbon footprint management is projected to be a $12B market by 2025,
-Carbon accounting and offset marketplaces in the U.S have raised more than $100M YTD.
-There have been dozens of new Venture Funds focusing exclusively on Climate Tech deals. Energy Impact Partners — founded in 2015, and 2150 VC — founded in 2019 are investing exclusively in Climate Tech.
Strict Government regulations on emissions reporting have lead Europe as a leader in Climate Tech Innovation—given sheer volume of startups produced in this sector, and overall funding of $11B year to date
Carbon tracking is an emerging market in the U.S — with corporations emphasizing commitments and a majority of startups founded in the last few years.
Current solutions offer broad tracking across industries. There is an opportunity for startups to focus on a specific industry — from supply chains to transportation. Eg: Vaayu is focusing on carbon tracking for retailers.
Majority of startups are tackling Carbon Offset API’s and Carbon SaaS tracking. There is a whitespace for innovation in consumer carbon tracking — current solutions focus on enabling purchasing of offsets rather than accurately reporting emissions. Apps like Joro are educating consumers on their carbon footprint and enabling to tracking and purchasing of offsets.
There are additional whitespaces to tackle emissions reporting for individual homes or residential areas, SMB’s, and local or global supply chains systems.
Five Predictions by 2030 ->
Carbon Management will be a multibillion dollar market with massive opportunity for innovation.
Carbon Tracking will become commonplace — strict Government regulations on emissions reporting will push corporations to accurately track and report emissions.
There will be new legislation to combat climate change—The Inflation Reduction Act has set goals to cut greenhouse gases in half by 2030 and net-zero no later than 2050 —which means increased funding and grants for clean-tech projects.
Startups will emerge for multiple facets of carbon reporting and offsetting — for individual homes, e-commerce, manufacturing, travel, supply chain, and much more.
There will be increased transparency for Carbon Offset projects—Technology such as drones and computer vision will enable consumers and corporations to view their impact of carbon offset purchases.
Are you excited about this!?
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