Berlin-based GreenTrade is a marketplace for forward financing of projects based on nature-centric carbon credits and impact claims. Today, the company announced the closing of a “near seven-figure” pre-seed funding round.
The investment was led by the US-American Climate/Web3 venture capital company, Cerulean, with participation from Draft Ventures, Allegory, and Flori Ventures, as well as several business angels and serial entrepreneurs, including Tom O’Keefe and Sundeep Ahuja, partners at investment firm Climate Capital.
Rethinking carbon credits
GreenTrade was founded in March 2022 by Katrin Klingenberg, Ulf Hackbarth, Carsten Hermann, and Frederick Leuschner, a team of serial entrepreneurs from Berlin/Eberswalde, Germany.
By transforming long-term offtake agreements with project developers into digital tradable assets, the climate tech business hastened the financing of new carbon projects. These NFTs are then made available to corporate buyers…
GreenTrade’s objective is to aid in climate change mitigation by providing an extra supply of 1 billion carbon credits by 2030.
Frederick Leuschner, co-founder and CEO at GreenTrade, says, “On the one hand, project developers face high up-front costs to generate carbon credits only in the future. On the other hand, companies committed to reducing their environmental impact are competing for a fast-dropping inventory of already existing credits.”
He further says, “We use forward contracts to close this gap: project developers receive financing right away, and corporate buyers get access to high-quality projects while protecting themselves against future price surges.”
According to the company, “The creation of carbon credits as well as all their transactions are recorded on the blockchain, guaranteeing the integrity and traceability of digital assets. The token protocol also allows project developers and third-party verifiers to enter measurement and verification information about carbon projects, such as data from satellites, drones, sound mapping, and soil analysis, offering absolute transparency for buyers. “The immutable records of the blockchain rule out any possibility of data manipulation,” says Leuschner.
El Gato project
According to the company, nature-based solutions that prevent new emissions or remove carbon from the atmosphere have the potential to provide up to one-third of the emissions reductions required to meet the Paris Agreement’s targets. The issue is that these initiatives get less than 3 per cent of total global climate finance. According to the United Nations Environment Programme, the world must address a USD 4.1 trillion financial gaps in nature by 2050 if it is to fulfil climate change objectives.
GreenTrade’s first nature-based carbon credits will be available in Q4/2022 in the areas of forest protection and ocean restoration. One example is the El Gato project, which was developed in collaboration with the German-Canadian NGO Wilderness International. The concept entails purchasing huge tracts of untouched rainforest in Peru and cataloguing them in the official land register, providing permanent legal protection.
El Gato will not only reduce the production of 260,000 tonnes of greenhouse gases over a 30-year period, but it will also provide positive externalities, such as the conservation of Amazonian species and biodiversity, as well as the development of local employment. The resultant carbon credits will be verified by Verra, the world’s premier carbon accounting organisation.
Jahed Momand, general partner at Cerulean (Santa Barbara) says: “Cerulean is an active investor within the intersection of climate tech and web3, and we look for teams building fundamental infrastructure necessary to scale climate impact. We believe in GreenTrade’s high-calibre team, their vision and experience in executing and scaling businesses. GreenTrade’s technology generates high-quality nature-based carbon credits, which face strong and increasing demand. This investment is a contribution to protecting both the financial and the environmental value nature provides.”
About Cerulean VC
Cerulean Ventures is a venture capital business that thinks natural assets can unleash the next USD 50 trillion in development while rewarding Earth’s regeneration via new coordination technologies. Cerulean Ventures invests in crypto/web3 startups that are building the infrastructure and tools needed to grow climate impact in the next decade.
