Former Canva engineer’s carbon credits startup banks $600,000 pre-Seed round

- February 7, 2024 2 MIN READ
CarbonHQ Allen Fan and Eugene Datsky
CarbonHQ cofounders Allen Fan and Eugene Datsky
Climate startup CarbonHQ, has raised $600,000 in pre-Seed capital to bring transparency and accountability to carbon credits.

The raise was backed by early-stage VC funds Galileo Ventures and Investible.

CarbonHQ aims to improve the efficiency and transparency of carbon projects and address the $3 billion voluntary carbon market (VCM). They are currently developing a digital platform to process on-ground data, automate issuance workflows and establish a direct link between credits and their underlying data.

Since releasing its beta platform mid-2023, CarbonHQ has run trial projects with leading carbon project developers globally, and won a UN carbon market Digital Innovation Challenge.

The VCM has grown at around 30% annually since 2015, and demand for high quality carbon credits is increasing as a result of commitments from corporations to reduce their CO2 emission.

But carbon project development is still stuck in digital 1.0, using Excel, PDFs and e-mail, creating significant efficiency and transparency challenges, with developers are spending up to three years on project setup and credit issuance. It’s also difficult for buyers to assess the quality of the credits, leaving companies potentially exposed to scam credits.

Some studies have suggested that as little as 12% of offsets being sold result in ‘real emissions reductions’.

CarbonHQ will use the funds for market expansion and team growth.

Allen Fan and Eugene Datsky cofounded their startup in 2022, meeting through the AfterWork Ventures platform BetweenWork, set up in 2021 to address tech redundancies.

Fan was previously a management consultant and venture capital investor in New Zealand, and more recently an investment manager one of the world’s largest carbon project developers, based in Sydney, while Datsky has spent nearly two decades leading engineering teams at the likes of Canva, HealthMarch and Jetbrains.

Fan said he felt the pain of the current system and saw the possibilities in a market for carbon credits could be worth up to US$50 billion in 2030.

“Carbon projects need to be more efficient and transparent to play a bigger role in fighting against climate change,” he said.

“We are thrilled to be backed by Galileo Ventures and Investible as we take on this challenge. Their support will allow us to deliver some pretty exciting solutions for our customers.”

Datsky added: “I’ve seen how technology completely transformed industries and I’m confident that the carbon market is on the cusp of major digital advancements. I’m excited to be working with like-minded investors to drive positive change for carbon projects.”

Investible investment manager Ben Lindsay said they backed the startup through their climate tech venture fund, which has a global mandate.

“We see loads of investment opportunities looking to solve problems in carbon project development. CarbonHQ’s platform stood out as a powerful tool that helps address the pain-staking process of manually tracking carbon projects in complex spreadsheets,” he said.

“Instead, the company is enabling customers to forecast and track impact directly and efficiently with a unique blend of technical insight and product vision. Combining Allen’s experience in carbon project development and Eugene’s technical know-how, we believe CarbonHQ are a winning team.”