Kita, the world's first carbon insurer, raises £350k in pre-seed round
by Startacus Admin
Innovative startup, Kita secures investment to support build and launch of its essential carbon insurance products.
Fab news for Kita, the world’s first carbon insurer, with the announcement that it has raised a heavily oversubscribed £350k pre-seed round led by Insurtech Gateway, alongside investors Carbon13, Climate VC and Echelon Capital.
To fight climate change, the world urgently needs to (1) stop emitting carbon, and (2) remove existing excess carbon from the atmosphere. Kita’s focus is carbon removal, insuring “carbon delivery risk” to enable carbon removal solutions to scale.
The Intergovernmental Panel on Climate Change states we need to remove billions of tons of CO2 annually for the remainder of the 21st century to enable a liveable and sustainable future for all. To put that into perspective, annual emissions today from human consumption of oil and gas products is 20 billion tons. If it takes a trillion dollar oil and gas industry to emit 20 billion tons of CO2, then a trillion dollar carbon removal industry will be needed to remove that same amount by 2050.
This is a scale-up task at unprecedented speed and magnitude, and it represents a huge opportunity for a new insurance market. Likewise, insurance is essential to enable this rate of growth. This can’t happen soon enough, and it is why Kita’s focus is developing innovative new insurance products in the emerging carbon removal space.
Most carbon removal solutions generate revenue via selling carbon units on the voluntary carbon market, which needs to grow more than 15-fold by 2030 to support delivery of net zero targets. Challenges within the voluntary carbon markets include lack of transparency and consistent risk management, leading to significant transaction risk - pre-sold carbon units have a risk of being underdelivered. This uncertainty leads to inefficient flows of capital to high-quality carbon removal projects.
Kita’s insurance products cover carbon delivery risk, removing a significant protection gap for both buyers and sellers in the market. Increased buyer trust in carbon delivery leads to greater flows of capital to help carbon removal projects grow. By introducing insurance to reduce those risks, carbon removal projects will command a higher price and attract inward investment.
This pre-seed round will accelerate Kita’s product build and hiring to launch its essential carbon insurance products.
Natalia Dorfman, Co-founder and CEO, Kita said: “The world is in a climate crisis, and carbon removal is an essential part of the solution. However, carbon removal is new, faces unique risks, and lack of insurance to address these risks is holding back development at the rate the world needs. Kita believes insurance is a crucial enabler - by removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon removal projects scale. We are passionate about bringing these dedicated carbon insurance products to market and we are thrilled to be working with Insurtech Gateway to do it at speed.”
Stephen Brittain, Co-Founder, Insurtech Gateway added: “Kita has found a very interesting role for insurance to play in accelerating the growth of carbon removal markets, and we believe the Kita team are the best people for the job. We are excited to help them get their product into market.”
Exciting times ahead for this innovative startup!
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Published on: 9th June 2022
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