Adam Neumann is back with a carbon credit startup with a crypto twist

Adam Neumann, WeWork’s infamous co-founder and ex-cult leader, is back with a new crypto startup, Flowcarbon — tackling the fast-growing carbon credit market. In Neumann fashion, he’s got grand ambitions backed by big investors.

Neumann who? Here’s the TLDR story…

1/ Beginning: Adam Neumann, master salesman — convinced global investors to pour billions into WeWork — valuing it at $47B at its peak.

2/ Climax: In 2019, Neumann’s financial mismanagement and drug use were exposed — and he was forced out of the company.

3/ Ending: Neumann made $1.7B on his exit — while employees were left with scraps. In 2019, WeWork went public, and is now valued at $5B.

Neumann is back with a new crypto startup. This week, Flowcarbon — co-founded and backed by Neumann — announced $70M in funding led by the crypto division of famous VC firm, a16z.

Flowcarbon is tackling one of the biggest global problems, climate change, in a fast-growing market — carbon credits.

• Per WSJ, the carbon market size is only several hundred million dollars — but people view it with the potential to grow into the billions.
• The crypto industry calls it the Regenerative Finance (ReFi) space — which is already becoming competitive with crypto startups like Toucan and Regen.

Pay to pollute market

Cap-and-trade programs aim to reduce greenhouse gases — by creating an open market to buy and sell carbon credits:

• Buyers: Companies can buy carbon credits to offset their emissions (i.e., factories, mining).
• Sellers: Those that capture and store emissions (i.e., farms, forest owners) can sell carbon credits.

These carbon credits fluctuate in price, and Bloomberg sees scenarios where prices can rise up to 3,000% by 2029.

To count the benefits towards their emission goals, organizations can retire carbon credits — removing them from the market — and receive a receipt in return.

But the carbon market is challenging to track. Carbon benefits can be over-exaggerated, and there’s a lack of regulatory standards and oversight.

Crypto startups are putting these carbon credits into the blockchain to solve the industry’s problems — tokenizing carbon credits, which can then be traded on crypto exchanges.

• In a way, carbon credits are one of the perfect applications of blockchain. The blockchain makes transactions transparent, easier to verify and cheaper.
• Per Dana Gibber, CEO and co-founder of Flowcarbon, traditional methods can take up to 30% for selling carbon credits while Flowcarbon charges 2% (Reuters).

Investors: Policing the carbon credit market

On Wednesday, Verra — the nonprofit that standardizes and tracks carbon credits — prohibited the use of creating tokens based on retired credits.

• Per Verra’s Chief Legal Officer Robin Rix — these platforms create confusion over who claims the carbon credit’s benefit (WSJ).
• But Verra is still open to exploring ways to turn these credits into tokens “in a way that prevents fraud and upholds environmental integrity.”

Token launch: Flowcarbon offered a private pre-sale of its Goddess Nature Token ($GNT), which has yet to launch publicly.