TLDR
- Flowcarbon, co-founded by WeWork’s Adam Neumann, is refunding investors after failing to launch its carbon credit token.
- The company raised $70 million, including $38 million from token sales, but faced market and regulatory challenges.
- Investors like Andreessen Horowitz are receiving refunds with conditions, including signing waivers.
- Flowcarbon cited tough market conditions and resistance from carbon registries as reasons for not launching.
- The company remains active in carbon finance despite the setback with its Goddess Nature Token (GNT).
Flowcarbon, a blockchain-based carbon credit platform co-founded by former WeWork CEO Adam Neumann, aimed to revolutionize the carbon credit market.
The company’s goal was to create a token called the Goddess Nature Token (GNT) that would represent carbon credits on the blockchain.
This approach was designed to make carbon credits more accessible to a wider range of investors and potentially increase participation in the carbon market.
In May 2022, Flowcarbon secured significant backing for its innovative concept. The company raised $70 million in a Series A funding round, with $38 million coming from the sale of its proposed GNT token. High-profile investors included tech-focused venture capital firm Andreessen Horowitz, General Catalyst, and Samsung NEXT.
Despite the initial excitement and substantial funding, Flowcarbon faced significant challenges in bringing its vision to reality.
The company encountered resistance from major carbon registries and struggled with unfavorable market conditions. These factors ultimately led to the decision not to launch the GNT token as planned.
It's been an energizing morning at the @Santander CIB and @XPRIZE 2024 Carbon Removal Capital Summit in SF! Message us if you're here so we can connect live! pic.twitter.com/Ati4eEyDTG
— Flowcarbon (@weareflowcarbon) September 10, 2024
After more than a year of waiting, investors began receiving refunds in recent weeks. Flowcarbon held Zoom calls with investors to explain the situation and initiate the refund process. The company cited tough market conditions and opposition from carbon registries as the primary reasons for abandoning the token launch.
The refund process came with certain conditions for investors. GNT purchasers were asked to sign a waiver of claims against Flowcarbon and its affiliates.
Additionally, investors were required to agree to confidentiality terms regarding the refund process. These conditions have raised some concerns among investors, particularly given the high-profile nature of the project and its founders.
Flowcarbon’s Future Direction
Despite the setback with the GNT token, Flowcarbon appears to remain active in the carbon finance industry. The company, now led by CEO Dana Gibber, continues to pursue its mission of aligning blockchain technology with environmental sustainability goals. However, the exact nature of their current projects and future plans remains unclear.
Carbon Credit Market Potential
The broader carbon credit market continues to show potential for growth. Analysts at McKinsey have predicted that demand for carbon credits could increase by a factor of 15 or more by 2030, and potentially by a factor of up to 100 by 2050. The market for carbon credits could be worth upward of $50 billion in 2030, according to these projections.
However, the challenges faced by Flowcarbon highlight the difficulties in tokenizing carbon credits. Concerns over potential double-counting and regulatory uncertainties remain significant hurdles for companies looking to bridge the gap between blockchain technology and environmental markets.
As of September 2024, the combined market cap of energy and environment-related tokens stands at $186 million, according to CoinGecko. The majority of this market (94%) is dominated by two tokens: Powerledger’s POWR and Energy Web’s EWT.
