The Carbon Economy - from Greenwash to Investment Grade Opportunities

The interest in reduced GHG emissions and offset schemes has been present for years already. As a VC, we suspected the hype around the topic and were looking for the right signals to enter the market. Those signals are present today. Being a vertical VC that focuses on the maritime and logistics space, we are well connected with two ends of the market - global leaders in the space (some of which are LPs in our fund) and startups targeting the domain. We can tell a real market trend when those two sides (corporate and startups) support it - which is clearly the situation today. Global corporations have the topic high on their agenda, and many young and creative startups addressing relevant challenges are flourishing. Check! ✅

And when it comes to investment opportunities - the common yardstick for screening such compelling startup opportunities applies - the team, the market, the competitive landscape, the product, and defendable IP. Over the last 12 months, we had a steady stream of qualified opportunities. Check! ✅

So the race is on…

As we look at the opportunities, we tend to categorize those into two main segments (this represents a subjective view of theDOCK’s team, as other dimensions may be applied):

1. Carbon removal strategies

2. Emissions monitoring, reporting, and verification (MRV), aka “carbon economy bookkeeping”

Carbon removal strategies - Carbon emission mitigation does the bulk of the work. Carbon credits provide for the gap to zero emissions. Those carbon credits were provided as “offsets” in the past, which resulted in carbon staying in the system. It is carbon removal that actually removes carbon from the system.

As such, we have focused on this stop-gap strategy of carbon removal. We screened a few companies which offered unique ideas. Standing out were cases such as Gigaton, CarbonBlue, and Rewind. These companies took a bold approach towards carbon capture - on a scale and for extended periods of time. We were compelled to take a position here as we felt the winner could take a significant market share with a unique product and a potential for a technology moat.

Emissions MRV - like the traditional economy and its financial statements, the carbon economy requires bookkeeping tools. The last few months have presented a constant stream of startups that approached us and offered various means to monitor and qualify levels of emissions associated with the end-to-end journey of the goods (focusing on the maritime segments). Examples include opportunities such as Toqua, OceanScore, Zero44, and others.

As a VC management team, we felt the time is right to take positions in the segment i.e., for us to make smart decisions regarding emerging opportunities. The carbon economy seems to be quickly developing with regulated monetization and incentive schemes that may prevail in the not-so-distant future. We are well into the race already.