ReFi Funding Heats Up: When Crypto Meets Climate Change
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ReFi Funding Heats Up: When Crypto Meets Climate Change
Private investors appear to be helping cryptocurrency companies address climate change issues.
Navigating Web3 tides with focused insightsAuthor: Dove
Translation: TechFlow Intern
Private investors appear to be helping crypto companies tackle climate change.
The ReFi movement has been rapidly growing over the past few months, with protocols like Toucan and KlimaDAO leading the charge. By forking Olympus and introducing DeFi mechanisms into the climate vertical, they are bringing a fresh wave of innovation to the industry.
But other projects have been around longer. For example, Nori is building a carbon removal market with higher transparency, verifiability, and quality, and recently raised $7 million in Series A funding. The round was led by M13, with participation from Toyota Ventures’ Climate Fund and Placeholder.
While some projects in the crypto space launched fairly (KlimaDAO raised $33 million via a liquidity bootstrapping pool on Copper, and C3 recently raised $336,000 on the same platform), others have opted to bring in external investors.
Since January 2021, there have been 10 deals in the environmental sector totaling over $33 million in funding, though it remains a relatively new vertical within the fundraising landscape.
Nonetheless, 66% of the capital injected since January 2021 was raised in just the past three months.
Led by ClimateTrade and TerraScale, more than $12 million was raised in January alone. 87.5% of the rounds were pre-Series A, and on average, projects building in the climate space have raised $4.2 million each, with the entire sector raising $27.2 million over the past 14 months.
Blockchain can address climate change in multiple ways. So far, four main categories can be distinguished in the capital market:
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Carbon markets and nature-backed tokens — Nori, ClimateTrade, Single.Earth.
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Fundraising platforms for impact-driven startups — Positive Earth
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Data-focused projects — TerraScale, dClimate
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Clean technology solutions for Bitcoin mining — MintGreen
Geographic concentration among blockchain climate ventures is lower than across the broader cryptocurrency industry. Since January 2021, 40% of funded teams have been based in Europe, 30% in North America, 10% in India, and 10% in South Africa.
From an investor perspective, it's notable that climate-focused funds are actively seeking opportunities in the Web3 space, such as Toyota Ventures’ Climate Fund, Amasia, USV’s Climate Fund, and ClearSky. Other funds, like Piva Capital, have directly committed to offsetting all past and future CO₂ emissions using high-quality carbon offsets from the Toucan Protocol.
As early as January 2021, Albert Wenger from USV stated, "Decarbonizing the economy and addressing past emissions (and their consequences) present numerous opportunities to build significant new companies capable of generating venture-scale returns."
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