(Credit: Pixabay)Climate technology company Patch has received $55 million in funding to help it continue building its carbon credit platform.
Patch says it will use the funding to enhance technology, expand into new markets, and hire more employees. The round of series B funding was led by Energize Ventures with participation from new and existing investors including Coatue Management and Andreessen Horowitz, bringing Patch’s total funding to $80 million.
The Patch platform helps businesses implement sustainability measures by using an enterprise-grade API or by directly purchasing carbon credits. The company says the transparent infrastructure of its system simplifies a traditionally complex process of obtaining carbon credits. Patch also can help companies with developing infrastructure to facilitate transactions on the voluntary carbon market.
The carbon credit market is expected to grow substantially over the next few years. A report from Coherent Market Insights says the carbon credit market will increase by more than 30% a year through 2027, and McKinsey Sustainability estimates the carbon credit market could increase by a factor of 100 through 2050.
A carbon credit represents a metric ton of carbon removed from the atmosphere, and it can be purchased by a company to offset the emissions from their operations. By obtaining a carbon credit, a company can then generate a defined level of emissions. Additionally, if a company has too many carbon credits, it can sell or trade them with other organizations. The voluntary credit market is decentralized and businesses can voluntarily buy and sell carbon credits that represent certified removals or reductions of emissions from the atmosphere.
A carbon credit trading exchange is being developed by Abu Dhabi Global Market and AirCarbon Exchange, as the market expands, and the United Nations also has a carbon offset platform. Microsoft has a goal of removing more carbon than it emits by 2030 and says it will purchase 1.5 million metric tons of carbon credits this year.
Another type of carbon removal project is underway in Wyoming, a direct air capture system that aims to remove 500 million tons of carbon from the atmosphere by 2030, as more industries look to offset their emissions. The International Panel on Climate Change says overall carbon removal capacity needs to increase by 1 million times to reach 2050 international net-zero goals.
Patch says its platform can be used by businesses of any size or budget to enter and navigate the carbon credit market. Over the past year, Patch says it grew its customer base to more than 100 companies globally.
Energize Ventures is focused on accelerating digital transformation in energy and sustainability. To date, it has funded 22 companies.
