At Vanagon, we are dedicated to backing game-changing European founders who are reshaping the infrastructure stack towards a Regenerative Economy, applying unstoppable technology such as Blockchain, AI, and IoT, while seizing the potentially biggest business opportunity of our time. Our portfolio companies are building solutions that are based on the principles of circularity, renewable energy systems, and in which nature has become a critical asset class.
Nature as an Asset Class – What does it mean?
Let’s take a look at where next-wave Internet technology is already helping accelerate the transition to a regenerative economy today. The voluntary carbon market (VCM) is the most known of a range of ecosystem service markets emerging, forming important tools to factor nature into the economic equation. Net zero pledges among Fortune 500 companies are about to become the new normal. For emissions that cannot be avoided or reduced, companies largely rely on offsetting via the voluntary carbon market (VCM). Sadly, today, the VCM is still largely dysfunctional. Many large players in the VCM market, such as the largest carbon registry Verra, were designed in the early 2000s and still mostly rely on technology from back then. APIs hardly exist. Carbon credits exist in the form of PDFs. Has a specific carbon credit already been used to offset an emission and therefore should be retired? Unclear. So «double spending» of carbon credits is a significant problem. Lack of transparency has also led to a high number of middlemen that are currently claiming a large chunk of the value creation. Only a small fraction of the price paid for carbon certificates actually reaches the projects. Furthermore, there is a lack of transparency regarding the quality of carbon credits. On average, the quality of carbon credits – if externally examined – is very low. The processes in the industry are surprisingly manual. To assess the amount of carbon sequestered and stored by a carbon project, registries have physically sent staff via intercontinental flights to sites, where they counted trees and measured them with tape.
How can technology help renew the voluntary carbon market?
The next-wave Internet technologies such as Blockchain or AI are massive catalysts to rebuild the dysfunctional market such as the VCM and finally make them work. Let’s dive into some examples from our portfolio.
Renoster – Creating Transparency Regarding Carbon Quality.
Our portfolio company Renoster brings radical transparency into the voluntary carbon market by assessing nature-based carbon projects at scale with remote sensing technology and machine learning and publishing the results. Their publications have led to a global media echo (picked up by The Guardian, Forbes, WSJ) and play an important role in rebuilding trust in the VCM by setting incentives for honesty and quality in the market. At the same time, Renoster has built a solid revenue stream from customers (e.g. Time, dpd) who would like to access Renoster reports before their publication.
Senken – Avoiding Double Spending of Credits & Enabling New Use Cases
Our portfolio company Senken, for instance, is the largest marketplace for digital carbon credits. Based on Blockchain technology, the transaction history of carbon credits becomes transparent. Double spending can be avoided. Additionally, entirely new use cases are enabled by this new level of digitalisation. Together with multinationals, Senken is already exploring micro-offsetting use cases for machines to automatically offset machine emissions in real-time. A use case that we expect to become a standard for every future-proof business.
Looking beyond carbon markets
Although carbon credits are the most known, they are only one of many classes in the rapidly growing market for nature assets. Other examples are ecosystem services that lead to an uplift in water, soil quality, or biodiversity. More and more large food producers, for example, are keen to reduce the risk from climate change in their supply chain. Innovative solutions help them conclude nature service agreements with farmers. The buyer pays the farmers for engaging in regenerative agricultural practices to improve the soil’s quality and its ability to store water, making them less vulnerable to harvest loss due to climate change. Additionally, the buyer can claim the uplift in ecosystem health as an asset and activate it on their balance sheets. Such novel collaborative models are already implemented and they are paving the way for a new trillion USD market for differentiated nature assets, connecting insetters, offsetters, investors, philanthropists, and public entities.
Interested to participate in this once in a lifetime market opportunity?
With a focused €30M fund, our commitment lies in seeding Europe’s most promising startups that drive the regenerative economy forward. Our unique edge? A deep-rooted belief in the power of decentralization and an eye for identifying the true movers & shakers in the entrepreneurial world using next frontier technology to solve global coordination failures. Our track record speaks for itself, with early portfolio startups securing significant investments from top-tier US VCs.
Invest with us in the system changers to a Regenerative Economy.
