Counteract, a VC fund focused on carbon removal, has closed a £35 million (~$42 million) round. The fund has attracted increased interest, as the need to develop scalable and effective carbon removal technology has been highlighted by numerous organizations, including the Intergovernmental Panel on Climate Change (IPCC).
And the sector did indeed receive a very strong boost throughout 2022, bringing in about $13.8 billion globally, according to data from Pitchbook.
Its inaugural fund is targeting a total of £35 million, and just now, Counteract reached its first close of £15 million (~$18 million), signaling that investors are eager to bet on the emerging industry of carbon dioxide removal or CDR.
Currently, Counteract has a dozen companies in its portfolio, with the only criteria for these companies being their ability to demonstrate a removal capacity of 500 million metric tons of CO2 by the mid century.
With that said, the VC fund does not limit its options to the exact method or form of carbon removal and is open to all approaches from nature-based solutions, such as reforestation and regenerative farming to engineered solutions like direct air capture (DAC) and everything in between.
Managing partner at Counteract Andrew Shebbeare acknowledged the fund’s narrow focus compared to other climate VC’s and referred to it as a ‘specialist fund within a specialism’.
Read more: Top 10 Carbon Removal Marketplaces In 2023
“But at the same time, we’re also broad in that we invest in all carbon removal pathways,” he added.
With that said, Counteract is also open to investing in companies that have ‘co-benefit’ solutions, such as cement produced from CO2, which hits two birds with one stone: decarbonizing the cement industry and removing CO2 from the atmosphere.
Another example is a company already in the VC’s portfolio that produces nickel as a byproduct of CDR.