Collaborative Fund & Tomás’ role 

Tomás is an investor at Collaborative Fund, a venture fund based in New York that has been supporting founders for over a decade. Collaborative Fund is focused on finding startups that are profitable and socially responsible, particularly those that are in the early stages of development. This strategy aligns well with investing in climate-related startups, which is an area of increasing interest for the fund. Tomás is responsible for identifying innovative startups working on challenging problems and taking calculated risks to support their growth. Collaborative Fund typically invests between half a million and $10 million in startups and provides ongoing support as they scale and become public companies. The fund has a successful track record of supporting startups like Impossible Foods, and is excited to double down on climate-related investments. Collaborative Fund is partnering with other organizations, such as Tito and Airminers, to address climate challenges. While investing in climate-related startups can be challenging, Tomás is excited to be part of the startup ecosystem at this moment and believes there is a lot of good work to be done.

AirMiners & Tito’s role

Tito is the CEO of AirMiners, a startup accelerator that aims to challenge the status quo and empower risk-takers to reverse climate change through carbon removal. AirMiners has a strong community and is involved in starting funds to support this goal. Tito’s background is in exploring different climate solutions, and he was drawn to carbon dioxide removal as the key bottleneck. At AirMiners, Tito is focused on developing ways to pull gigatons of carbon dioxide from the atmosphere in an economically viable way. The company recently had their second demo day for their accelerator, and Tito is excited about the progress they are making.

Why focus on carbon removal

Tito explains that carbon removal is a crucial solution to climate change, as stated by the IPCC. While decarbonization is necessary, it alone is not enough to maintain a stable climate. The removal of carbon dioxide from the atmosphere is needed, and it presents a significant challenge that requires a market for solutions. According to Tito, the IPCC models suggest that removing 10 billion tons of carbon dioxide annually by 2050 would create a market worth a trillion dollars at $100 per ton. Tito sees the challenge of carbon removal as an opportunity for risk-takers to create businesses that address this massive issue.

Tomás adds that the focus on carbon removal presents a significant opportunity for investors and entrepreneurs to build profitable companies that can address both a business need and a societal existential question. The need for carbon removal arises from the fact that stabilizing the climate requires removing carbon, not just reducing emissions. According to Tomás, in the next 30 years, a new industry, the size of oil and gas, needs to be created to achieve this goal, requiring the invention of new technologies, scaling those technologies, financing infrastructure, and measuring carbon dioxide that is being removed. He emphasizes that there is a massive potential market for carbon removal, with projections of reaching $50 billion by 2050. Tomás stresses that high-quality carbon removal is essential to maintain the earth below the critical 1.5-degree target, which, if exceeded, could result in catastrophic weather events. While acknowledging challenges in the offset market, he sees a real opportunity to scale high-quality carbon removal to help address the pressing societal and environmental challenges.

The state of the carbon removal space today

Tito is optimistic about the future of carbon removal through evident success. He points out that over 70 startups graduated from AirMiner’s startup accelerator last year, raising over $23 million of venture funding so far. Three of them have won XPRIZE million-dollar milestone awards, and two of them received student awards from XPRIZE for a total of about a quarter million dollars. Out of the 15 XPRIZE milestone winners, 10 of them are members of AirMiners. As a witness of seeing people coming up with solutions, getting traction with customers, and raising funding, he is confident in what’s possible in carbon removal.

Tomás acknowledges that while momentum is building in the carbon removal space, there is still a long way to go to reach the 10 billion tonnes per year goal. A few years ago, only a few thousand tonnes of high-quality carbon removal were happening annually, and there were very few facilities capable of removing carbon at scale. However, Tomás finds it exciting to see the amount of innovation and the increasing number of companies working on carbon removal. The Shared Future Fund, which provides $100,000 to 100 early-stage companies per year, has helped founders pursue various approaches to carbon removal, such as direct air capture, biomass storage, and reforestation. Tomás notes that the Inflation Reduction Act, which unlocks billions of dollars in funding for companies that can store carbon permanently, is a game-changer and one of the most exciting tailwinds in climate.

How large investments have helped the marketplace grow

Tito explains that the XPRIZE for carbon removal was a significant catalyst for the growth of the carbon removal sector and says it’s a story of how AirMiners got lucky. They had been building a community around creating solutions for carbon removal and were gearing up to announce their accelerator program. Then, Elon Musk tweeted that he was going to put up a $100 million prize for removing carbon dioxide from the atmosphere, and XPRIZE reached out to Tito’s community to get all the AirMiners together in a room. Since then, the community has grown to almost 2000 people and they’ve had over 700 applications to their accelerator program. In Tito’s eyes, the XPRIZE was seen as a major tailwind that accelerated the development of new solutions and increased the number of people who wanted to get involved in carbon dioxide removal.

Next, Tomas discusses the Inflation Reduction Act (IRA) passed by the US government, which provides funding for carbon removal companies and makes businesses that may not have been viable, viable, and attractive over time. The 45Q tax credit, which provides money for storing a tonne of carbon permanently in a geological reservoir, increased from $50 to $180 per tonne and is now a direct payment for the first five years. This tax credit is a game-changer for startups, which will have a guaranteed purchaser or someone who will pay for their product. The IRA is expected to have a positive impact on carbon removal startups, with the 45Q tax credit being the most significant. Additionally, the involvement of corporate players like Stripe, Shopify, Frontier, Salesforce, and Microsoft in leading the development of the carbon removal sector is expected to bring trust to the ecosystem and enable companies to scale quickly.

Why companies should get involved & become purchasers to support the carbon removal marketplace

Tomas recommends that companies should get involved in carbon removal now because the market is in its early stages and their participation can have a significant impact. By getting involved early, companies can position themselves for a future where Net Zero commitments include carbon removal. Early participation can also help companies avoid being caught off guard by the costs associated with carbon removal. Moreover, by joining now, companies can play an important role in tackling climate change and help shape the industry’s future.

Resources Mentioned

• Collaborative Fund
• AirMiners
• AirMiners Startup Accelerator
• AirMiners Youtube Channel
• XPRIZE for Carbon Removal
• Frontier: Stripe Climate
• Shopify’s Sustainability Fund
• South Pole: Carbon Removal Solutions
• Microsoft: Carbon Removal Program

Connect with Tomás Álvarez Belón & Tito Jankowski

• Connect with Tomás on LinkedIn
• Connect with Tito on LinkedIn

Connect with Jason Rissman

• InvestedinClimate.com
• On LinkedIn
• On Twitter

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