The carbon offset API developer Patch confirms a $4.5 million round led by Andreessen Horowitz

Published February 24, 2021

Patch, the carbon offset API developer, has raised $4.5 million in financing to build out its business selling customers a way to calculate their carbon footprint and identify and finance offset projects that capture the equivalent carbon dioxide emissions associated with that footprint.

Confirming TechCrunch reporting, Andreessen Horowitz led the round, which also included previous investors VersionOne Ventures, MapleVC and Pale Blue Dot Ventures.

Patch’s application protocol interface works for both internal and customer-facing operations. The company’s code can integrate into the user experience on a company’s internal site to track things like business flights for employees, recommending and managing the purchase of carbon credits to offset employee travel.

The software allows companies to choose which projects they’d like to finance to support the removal of carbon dioxide from the atmosphere, with projects ranging from the tried and true reforestation and conservation projects to more high-tech early-stage technologies like direct air capture and sequestration projects, the company said.

Andreessen Horowitz could make the carbon offset API Patch its latest climate bet

Patch founders Brennan Spellacy and Aaron Grunfeld, two former employees at the apartment rental service Sonder, stressed in an interview that the company’s offset work should not be viewed as an alternative to the decarbonization of businesses that use its service. Rather, they see Patch’s services as a complement to other work companies need to do to transition away from a reliance on fossil fuels in business operations.

Patch co-founders Brennan Spellacy and Aaron Grunfeld. Image Credit: Patch

Patch currently works with 11 carbon removal suppliers and has plans to onboard another 10 before the end of the first quarter, the company said. These are companies like CarbonCure, which injects carbon dioxide into cement and fixes it so that it’s embedded in building materials for as long as a building lasts.

“Carbon removal credits can help to dramatically accelerate the deployment of technologies like CarbonCure’s, which are absolutely critical to helping us reach our global climate targets. Demand for high-quality, permanent credits is sky-rocketing, and listing credits on Patch will help us to attract a broader range of buyers,” said Jennifer Wagner, president of CarbonCure Technologies, in a statement.

Persefoni launches with $3.5 million and a carbon accounting system for big business

It also has around 15 customers already using its service, according to earlier TechCrunch reporting. Those buyers include companies like TripActions and the private equity firm EQT, which intends to extend the integration of Patch’s API from its own operations to those of its portfolio companies down the road, according to Spellacy.

Grunfeld said that the company would be spending the money to hire more staff and developing new products. From its current headcount of six employees, Patch intends to bring on another 24 by the end of the year.

As the company expands, it’s looking to some of the startups providing carbon emissions audit and verification services as a channel that the company’s API can integrate with and sell through. These would be businesses like CarbonChain, Persefoni and another Y Combinator graduate, SINAI Technologies.

“An increasing number of businesses are taking leadership positions in an effort to reduce emissions to try to counteract global warming,” said Jeff Jordan, managing partner at Andreessen Horowitz. “Patch makes it much easier for companies to add carbon removal to their core business processes, aggregating verified carbon-removal supply and offering turn-key access to it to companies through an easy-to-implement API.”

YC grad SINAI helps companies understand their emissions in a bid to fight climate change

CarbonChain is using AI to determine the emissions profile of the world’s biggest polluters

Published August 21, 2020

It was the Australian bush fire that finally did it.

For 12 years Adam Hearne had worked at companies that represented some of the world’s largest sources of greenhouse gas emissions. First at Rio Tinto, one of the largest industrial miners, and then at Amazon, where he handled inbound delivery operations across the EU, Hearne was involved in ensuring that things flowed smoothly for companies whose operations spew millions of tons of carbon dioxide into the environment.

Amazon’s business alone was responsible for emitting 51.17 million metric tons of carbon dioxide last year — the equivalent of 13 coal-burning power plants, according to a report from the company.

Then, Hearne’s home country burned.

In 2019 wildfires erupted that engulfed more than 46 million acres of land, destroyed over 9,000 buildings, and killed over 400 people and untold numbers of animals — driving some species to the brink of extinction.

Hearne, along with an old friend from his business school rugby days (Roheet Shah) and computer science and machine learning experts from Imperial College of London (Yuri Oparin and Jeremiah Smith), launched CarbonChain that year. The company, now poised to graduate from the latest Y Combinator cohort, is pitching a service that can accurately account for emissions from the commodities industry — which is responsible for 50% of the world’s greenhouse gas emissions.

The company’s services are coming at the right time. Countries around the globe are poised to adopt much more stringent regulations around carbon dioxide and greenhouse gas emissions. The European Union is slowly working toward passage of sweeping new regulations on climate change that are mirrored in the region’s local economies. Even petrostates like Russia are poised to enact new climate regulations (at least according to Russian officials).

What’s missing in all of this are ways for companies to accurately track their emissions and technologies that can adequately monitor how well emissions offsets are working.

CarbonChain tackles this problem by going to the sectors that are responsible for the largest percentage of greenhouse gas emissions, Hearne said.

“The world needs hard accounting and hard numbers of what commodities companies are producing,” said Hearne in a July interview.

To ensure that emissions reductions and regulations are working, regulators need to go after oil and gas and commodities and minerals producers, according to Hearne. “Those sectors are uniform and carbon intensive and that’s how you quantify them,” he said.

CarbonChain has built models for every single asset in the supply chain for these industries, according to Hearne. The company has created digital twins of every piece of equipment used in heavy industry. If CarbonChain can’t get the information about the equipment from the companies that use it, they go to the engineering firms that built the equipment or facility for the company.

“In order to get a number that doesn’t get laughed out of the room we have to go down to the aluminum smelter that has a power station right next to it,” said Hearne. “Ninety percent of its footprint is its electrical usage.”

According to Hearne, CarbonChain’s system is so precise that it can tell users how much carbon emissions are embedded in a cup of coffee or a glass of wine (which is two pounds of carbon dioxide for imported wine, by the way).

CarbonChain is already selling its services to commodities producers and carbon traders who are operating in existing carbon trading schemes.

So far, the company has received roughly $500,000 from the U.K. government and an investment from one of its (undisclosed) commodities customers.

But CarbonChain’s technology seems to have the most rigorous methodology of any of the companies that’s purporting to do emissions monitoring. Other startups purporting to provide carbon emissions data for companies include Persefoni, which raised $3.5 million for its solution, and another Y Combinator graduate, SINAI Technologies.

If the company can actually measure the embedded emissions of materials down to a single piece of rebar, it could have huge consequences for industry broadly.

The company also slots nicely into the trend of entrepreneurs with deep industry experience building vertical solutions based on the collection of massive data sets using machine learning.