The Kiloton Fund has distributed grants of $10,000 to 20 start-ups that have presented creative ideas. The initiative is being led by US investor group AirMiners and also includes a major offtake agreement with e-commerce giant Shopify, which enhances the vision of such pioneers. As the world continues to search for an efficient solution to the climate crisis, the Kiloton Fund will ensure that technologies that have potential will be supported to enable them to achieve success.
The need for carbon removal solutions
The Kiloton Fund has been established to fund carbon removal start-ups, many of which currently lack the necessary funding. The fund anticipates its future revenue through the sale of carbon credits, while investing long-term capital to fuel the development of critical technologies at an early stage.
Innovative financing model
The Kiloton Fund is a pilot project, with the aim that it will be followed by larger funding campaigns. Regarding the long-term strategy, AirMiners is working on the development of the Megaton Fund, which will help more carbon removal start-ups supported by the Kiloton Fund. It should be noted that the Kiloton Fund implementation funding model is based on a performance-based seed capital mechanism, where it invests in early-stage start-ups for a fraction of their revenue from carbon credits in the future.
While offering initial funding to start-ups, it also establishes investor company incentives for long-term value. The 20 selected start-ups will receive $10,000 in funding each from the Kiloton Fund. In addition, Shopify has pledged to purchase $100,000 worth of carbon credits from these firms that will improve their financial viability and market position.
winning startup
The Kiloton Fund has invested in 20 start-ups, covering a variety of carbon removal technologies. These include direct air capture (DAC), rock weathering, ocean-based carbon removal, biochar and carbon utilization. The list of winners also includes UK-based Airhive which has used a “fluidized bed” to extract CO2 from the air.
Some of the other emerging start-ups are from the United States, Canada, Denmark, Kenya, India, UAE, and Germany, respectively. Such representation also highlights the fact that there is a growing global awareness about the need to scale up innovative carbon removal technologies and the potential of these solutions to have a meaningful impact on climate change.
Shopify's Participation in the Kiloton Fund
The Shopify-linked Kiloton Fund is a sign that private sector organizations are becoming increasingly important players in tackling climate change. Shopify demonstrated its commitment to its sustainability program by offering to buy carbon credits from Kiloton Fund start-ups. This is not only a $100,000 off-take deal for start-ups that provides them with cash from day one, but also a means of proving that their technologies work in the real world.
conclusion
The Kiloton Fund is a positive development to combat climate change. In this way, the fund supports innovation in the early stages of development and ensures future revenue by selling carbon credits from completed carbon removal projects. Shopify’s inclusion in these 20 start-ups gives them the advantage of effectively addressing global emissions in the future.
