Flowcarbon Returns $70M to Investors as GNT Token Project Fails to Launch

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As a seasoned researcher with a keen interest in both the tech and environmental sectors, I find myself intrigued by the saga of Flowcarbon and its GNT token project. Having followed Newman’s career since his WeWork days, it seems like he has a knack for launching ambitious projects that stir up quite a storm.

The company identified multiple factors contributing to the unsuccessful launch, such as adverse market circumstances, difficulties with carbon registries, and concerns over the quality of carbon credits in the voluntary market, which is currently under significant stress.

The GNT Token Project Raised $38M

In the year 2022, Flowcarbon successfully secured a capital investment of $70 million. This significant funding was backed by Andreessen Horowitz, along with other notable investors. Additionally, renowned Hollywood producers Sam and Ashley Levinson, under General Catalyst and Samsung Next, were among those who contributed to the company’s Series A round.

GNT sales made a significant contribution of at least $38 million towards the total funds collected, but it’s uncertain whether that amount includes purchases made by retail consumers.

The idea revolves around creating a digital token backed by carbon credits, each representing the removal or prevention of one ton of carbon dioxide from the environment. This digital currency would have been traded on the Celo blockchain, which invested $10 million in GNT to handle its own emissions.

It was recently revealed that the business has been repaying funds to investors following prolonged delays in implementing its goals. However, this announcement also raises the question of whether Flowcarbon suffered such a major collapse due to internal or external issues.

As a crypto investor, I’ve noticed that the struggles my firm is facing, such as refunds and difficulties, highlight substantial challenges within the broader carbon market. Specifically, two major obstacles stand out: escalating asset volatility and the process of tokenizing carbon credits. The aim of our project was to utilize our GNT coins for the tokenization of carbon credits, making it possible for investors like myself to access these valuable assets from any corner of the globe.

Flowcarbon Blames Verra’s Ban for Disrupted Carbon Token Project

Flowcarbon acknowledged that they started the refund process last year following questions from Forbes. Instead of making the reimbursements public, they opted to conduct confidential discussions with their sponsors regarding this matter.

Our company faced comparable obstacles to those that arose for earlier crypto-carbon projects like GNT. For instance, Toucan and KlimaDAO, during the year 2021, tokenized millions of retired carbon credits. This action sparked debates about potential double counting issues originating from various registries.

Regarding this development, Verra, a leading international supplier of greenhouse gas credits, opted to discontinue the tokenization of retired credits in 2022. This action left Flowcarbon’s investors discontented as it impeded their company’s ability to issue tokens.

It’s intriguing to note that the startup has managed to carry on business as usual amidst ongoing reimbursements. The company announced through a recent social media post that the CarbonSmart summit is scheduled for September 23rd.

Experts Questioned Newman’s Carbon Credit Project Outcomes

Newman has raised millions of dollars from investors since the carbon credit venture was launched. However, experts warned that merely facilitating the purchase and sale of credits would not significantly address the fundamental causes of climate change.

Professor Bruce Usher from Columbia Business School, and former CEO of EcoSecurities, stated, “For a carbon credit to make a difference in combating climate change, it must be additional.” Furthermore, he suggested that entities such as Flowcarbon may not tackle the fundamental problems within the carbon market.

Additionally, it’s worth mentioning that after his tenure at WeWork, Flowcarbon’s former CEO, Newman, embarked on other ventures. In 2022, he announced the launch of a new venture named Flow, with the aim to redefine apartment living. Beyond GNT projects, Andreessen Horowitz also invested a substantial sum of $350 million into this project, making it one of their largest individual investments.

Moreover, Neumann has been trying to purchase WeWork again at a price over $500 million ever since it emerged from bankruptcy in May.

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2024-09-16 18:34