Flowcarbon secured thousands and thousands of dollars in funding from investors like Andreessen Horowitz to link carbon credits to the blockchain, but its “Goddess Nature Token” never made it to market.
From Sarah EmersonForbes Employee
FLowcarbon, the climate technology startup co-founded by WeWork’s Adam Neumann, has quietly refunded investors after years of failing to launch its “Goddess Nature Token.” Forbes learned.
Since its debut greater than two years ago, the startup has struggled to comprehend its mission of bringing carbon credits to the blockchain. In 2022, Flowcarbon announced that it 70 million dollars in funding by investors similar to Andreessen Horowitz to create a brand new token backed 1:1 by carbon credits, certificates that firms typically buy in bulk to offset their greenhouse gas emissions. Each credit represents one ton of carbon dioxide removed or prevented from entering the atmosphere. Tokenization would theoretically make it easier for anyone to take part in the carbon market, a system that some Reports claimed can do more harm than good.
But in recent weeks, Flowcarbon has been issuing refunds to individuals who bought its Goddess Nature Token and waited years for a launch that never happened. According to sources the corporate contacted last month, Flowcarbon cited market conditions and resistance from carbon registries as the explanation for returning buyers’ funds slightly than holding them indefinitely. These people said Forbes that the corporate shared this information through Zoom calls.
As a part of the refund process, buyers of the Goddess Nature Token were asked to sign a release that included a comprehensive waiver of claims against Flowcarbon and its affiliates, in addition to confidentiality terms, in response to a contract that Forbes.
“Demand for advance sales was so high that everyone was asked to help.”
Flowcarbon didn’t reply to questions on the refund. It said Forbes“It is well known that due to the delays in the industry since last year, we are offering refunds to private GNT buyers on standard terms while we continue to grow Flowcarbon as a leader in carbon finance.”
At the start of the 12 months, Flowcarbon stopped using Discord as a communication channel and declared Forbes that “anonymous users [were] We are increasingly publishing inappropriate content, sometimes graphic in nature.” Spokeswoman Jennifer Owens added: “Email, phone and Zoom are all much more effective for communicating directly and regularly with our audience, as are X and LinkedIn, where we are very active.” Flowcarbon doesn’t appear to have announced the recent refunds on any public platform.
Flowcarbon will not be the one crypto carbon project, but its profile has arguably been the best, due to Neumann’s exposure at WeWork and a variety of key backers. “Adam and Rebekah’s vision is an important part of the story and it is actually the birth of the company,” Andreessen Horowitz, general partner Arianna Simpson was enthusiastic in the course of the $70 million Series A she led and praised Flowcarbon as “Best of his breed.” Also on the cap table are General Catalyst, Samsung Next, Hollywood producers Sam and Ashley Levinson and euphoria Producer Kevin Turen, who passed away last November. “Demand for pre-sales was so high that everyone was asked to help,” said a former Flowcarbon worker ForbesAndreessen Horowitz didn’t reply to a request for comment.
At least $38 million of this $70 million round was through the sale of Flowcarbon’s token, even though it is unclear whether this number includes retail customers. Venture capital firm Fifth Wall bought value $4 millionand didn’t reply to questions on whether it was also refunded. At one point, Flowcarbon had a “required minimum purchase amount” of $25,000 for pre-sale participants, the corporate said Forbes Beginning of the 12 months, However, he stressed that the worth was “never intended as a minimum price” and that many purchases were made at lower prices.
The heyday of cryptocurrencies gave rise to quite a few startups taking a look at tokenizing carbon credits: the thought was that blockchain could facilitate the buying and selling of those credits. In traditional carbon markets, credits are typically withdrawn after purchase to redeem their emissions advantages and take away them from circulation. But in 2021, thousands and thousands of withdrawn carbon credits were tokenized by projects like Toucan and KlimaDAOwhich has caused among the world’s largest carbon registries – standards organizations that oversee vast databases of carbon offsets – to fear that their value is being counted twice. In November 2021, before Flowcarbon had even launched publicly, Verra warns against the practice.
The voluntary carbon market, which supposedly allows firms and individuals to offset their emissions, grew to around 2 billion US dollars in 2021. But lately, a variety of investigations have found that among the projects that provide credits to registries like Verra had exaggerated their benefits, could probably not be removed Carbon dioxide from the atmosphere or related to alleged Human rights violations. A Marketplace report noted that the worth of carbon credits has fallen dramatically over the past 12 months consequently of those claims. In May, the Biden administration announced a Series of federal guidelines The aim is to steer buyers towards higher-value offsets.
“Do we have to expect that our money will be tied up for another year with the pre-sellers?”
While Flowcarbon has declared that only non-retired, certified credits would back the token, meaning only token holders could claim their offset payments, Verra’s announcement had a chilling effect on the launch. According to staff updates posted on Discord throughout 2022, the launch was delayed from January to February and March of the identical 12 months. In May Verra announced that it had completely banned the tokenization of idle credits in an effort to find an answer that will “prevent fraud and maintain environmental integrity.” Two months later, Flowcarbon CEO Dana Gibber told Wall Street Journal that the market launch was ultimately paused to “wait for the markets to stabilize.”
Buyers were frustrated. “For the pre-sellers: does our money have to be locked for another year?” asked one on Discord in September 2022. Earlier this 12 months, Flowcarbon shared Forbes that since 2023 it has been its policy to grant all refund requests.
“Verra stands by its May 2022 decision to prohibit the practice of creating instruments or tokens based on idle balances,” said Lara Kennedy, spokeswoman for the registry. Forbes. While there proceed to be internal discussions about potential blockchain applications, “there is no projected date as to when Verra will make its next announcement on this topic.” Flowcarbon has said it “maintains a very close and collaborative relationship with Verra and Gold Standard,” one other major registry.
Have a tip? Contact reporter Sarah Emerson at semerson@forbes.com or 510-473-8820 on Signal.
While the day-to-day management of Flowcarbon is the responsibility of sisters Gibber and COO Caroline Klatt, the thought behind the corporate comes from Neumann and his wife Rebekah Neumann. During WeWork’s failed IPO in 2019, the Neumanns revealed They pledged $1 billion to charity and claimed that they had funded efforts to conserve “over 20 million hectares of intact tropical forest,” but didn’t say where.
Gibber and Klatt have said that Flowcarbon was incubated by Neumann’s family office, 166 2nd Financial Services, which invested an undisclosed amount in the corporate. After the 2 co-founded and sold a chatbot marketing platform to a personal equity firm in 2020, “Gibber and Klatt got a call from a close person in our network who worked at a family office,” Gibber said in a podcast in 2022. They were asked if they might research the specifics of the carbon market, she added. “That’s how Flowcarbon evolved.”
This “close person” could possibly be Ilan Stern, the investment chief of Neumann’s family office, who can be the sisters’ cousin in response to public documents, and two former Flowcarbon employees who claimed that Gibbers and Klatt’s brother also works at Flowcarbon. The company confirmed these family ties to Forbes.
In 2022, Neumann founded the eponymous real estate startup Flow, which led some Flowcarbon employees to wonder if the businesses would eventually enter right into a partnership, former employees said ForbesFlowcarbon has stressed that there are not any plans for the businesses to collaborate.
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