No more critical weapon in the battle against climate change may exist than reducing carbon emissions. According to climate experts, carbon removal will need to scale by roughly 1 million times its current capacity to reach the world’s climate goals by the middle of the century.
Getting there will require a commitment from all sectors of the economy, from large corporations to small businesses.
Big companies will have to do much of the heavy lifting because they produce most of the world’s emissions, but they also have the financial resources to invest in new technologies and buy carbon credits at scale.
Things are trickier for small businesses with limited capital. This is where companies like Patch Technologies can provide a valuable service. Through its Application Programming Interface (API), Patch offers a platform that lets customers build carbon removal directly into their digital products and services.
The platform is designed to neutralize the carbon impact of everyday transactions such as shipping, travel, and financial services.
It is ideal for customers from e-commerce and fintech to shipping/logistics and cryptocurrency. Companies can also use Patch to compensate for emissions within their operations and supply chain.
One of the San Francisco-based startup’s goals is to identify potential clients that are struggling to integrate sustainability and carbon neutrality into their businesses, often because of a lack of resources. With Patch’s platform, enterprises of any size and budget can purchase carbon credits to take climate action.
“Our infrastructure lowers the barrier to entry for both businesses and climate project developers looking to enter the carbon market, which, in turn, could help unlock 20% of the climate change solution the world so desperately needs,” Patch CEO and Co-Founder Brennan Spellacy said in a press release.
Patch aims to reach many more customers following a Series B funding round that raised $55 million. The round, announced in September, was led by Energize Ventures, with participation from new and existing investors such as Coatue Management and Andreessen Horowitz. The round brought Patch’s total funding to $80 million since it was founded in 2020.
Proceeds will be used to grow Patch’s customer base, enhance its technology, expand into new markets, and hire more staff. Customer-wise, the company is already on the fast track after having grown its client base five-fold to more than 100 companies worldwide over the past year.
Among the customers using Patch to integrate climate action into their businesses are the following:
- Afterpay, is a buy now, pay later fintech that uses Patch to help customers offset the emissions of their purchases.
- EQT, is a Swedish private equity firm that uses the Patch platform to neutralize its emissions through investments in climate innovation.
- Shop Apotheke, a European e-pharmacy that uses Patch to buy credits that neutralize emissions.
- Just Salad, a New York-based fast-casual restaurant chain that recently integrated Patch into its mobile app, letting customers neutralize their order’s carbon footprint in a single swipe.
Patch’s expansion comes during a period of rapid growth in the carbon credit market. As Environment + Energy Leader recently reported, researcher Coherent Market Insights estimates that the carbon credit market will increase by more than 30% a year through 2027, while McKinsey Sustainability estimates that the market could increase by a factor of 100 through 2050.
Energize Ventures Partner Tyler Lancaster, who joined the Patch board of directors following the recent funding round, said the market for carbon credits is on a trajectory to reach $50 billion over the next 10 years. The challenge now is streamlining the market so more companies can take part.
“Today’s carbon credit infrastructure is highly fragmented and lacks standardization, making it difficult and complex to tap into,” Lancaster said in a press release.