(Bloomberg) —
A new venture capital firm called Superorganism is betting on biodiversity.
“We are the first venture firm focused on biodiversity as a problem, which is a totally new category from climate tech or other types of sustainability approaches,” said Tom Quigley, co-founder and managing director of Superorganism.
Quigley, a coral reef conservationist turned investor, said Superorganism is investing in early-stage startups developing technologies to help solve the accelerating biodiversity crisis. Based in San Francisco, he co-founded Superorganism in 2022 with Kevin Webb, a New York angel investor and conservationist.
The steep decline in biodiversity due to climate change, pollution, overfishing, deforestation and development has been decades in the making. Animal populations worldwide have plummeted nearly 70% since 1970 and the United Nations estimates that 1 million species are at risk of extinction.
But only in recent years has biodiversity loss become a financial concern. A 2020 report issued by the World Economic Forum estimated that half of global GDP, or $44 trillion, is dependent on nature, and pressure is growing for corporations to disclose biodiversity risk and take actions to mitigate such losses. A 2021 World Bank study found that the global economy could lose $2.7 trillion a year from biodiversity loss.
“Public finance is simply not enough” to address the biodiversity crisis, Cornell University business professors Andrew Karolyi and John Tobin-de la Puente wrote in a February 2023 paper. “This so-called ‘biodiversity financing gap’ is estimated to be nearly an order of magnitude larger than current funding for biodiversity, and there is virtually no expectation that governments will be able to fill that void,” according to the paper, published in the journal Financial Management.
While venture capital investors have poured billions of dollars into climate technology startups, Quigley and Webb said they saw a dearth of funding and support for biodiversity tech founders.
“We’ve been working together for two years, and in that time haven’t met any publicly announced, biodiversity-focused firms, or heard of any from our networks of founders,” Webb said.
Geoffrey Heal, a professor of social enterprise at the Columbia Business School, said that while a few biodiversity-oriented investment funds exist, they tend to prioritize conserving landscapes and endangered species rather than on developing technology. “It’s an area where there’s not a lot of commercial capital,” he said. “My guess is that the number of startups that can be described as tech startups but focusing on biodiversity is very small. I certainly hope it’ll grow but at the moment, it’s a very thin field.”
Superorganism is targeting investment in startups that directly address drivers of extinction, such as land use, as well as those that tackle the overlap between biodiversity loss and climate change or are developing technology such as AI and robotics that can be deployed for conservation.
“Founders and teams that are working on biodiversity loss need a set of investors and support systems and networks that understand the problem they are trying to face,” said Quigley.
He and Webb wouldn’t comment on the size of any funds they have raised but said Superorganism has so far invested in 11 startups.
One, Planet A Food, has developed technology to make a cocoa-free chocolate that its founders hope will reduce the need to log rainforests for cocoa plantations. Another, Inversa, creates luxury leather from the skins of invasive species like lionfish, which are wiping out native fish species in the Caribbean that keep coral reefs healthy. “You’re creating a market to continue to fund removal of invasive species at scale,” said Quigley.
Alfonso Pating, manager of climate finance at environmental group Natural Resources Defense Council, said venture firms’ higher tolerance for risk could help demonstrate the viability of biodiversity investments.
“I believe VCs can fill a critical gap in the research and development of new technologies, such as better monitoring technologies, as well as help provide funding to pilot and scale existing technologies,” he said.
To contact the author of this story:
Todd Woody in San Francisco at twoody4@bloomberg.net
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