Former WeWork CEO Adam Neumanns climate tech startup Flowcarbon has reportedly started refunding investors after failing to launch its much-anticipated Goddess Nature Token (GNT).
According to a Forbes report from earlier in the week, the company has struggled to realize its vision of tokenizing carbon credits.
Project Raised $38M From Token Sales
Flowcarbon initially raised $70 million in 2022, with major investors like Andreessen Horowitz supporting the project. Its Series A round also included contributions from General Catalyst and Samsung Next, as well as prominent Hollywood producers Sam and Ashley Levinson.
At least $38 million of the money raised came from GNT sales, though it remains unclear whether this figure includes retail buyers.
The idea was to create a token backed by carbon credits, which represent one metric ton of carbon dioxide either removed or prevented from entering the atmosphere. The cryptocu would have been traded on the Celo blockchain, which itself had bought $10 million worth of GNT to set off its own emissions.
However, it recently emerged that the startup has been returning money to investors following long delays in actualizing its plans. It blames the turn of events on difficult market conditions and pushback from carbon registries.
According to sources quoted in the Forbes report, those who had invested in the enterprise were required to sign a waiver, which released it from any claims and included confidentiality terms.
Flowcarbon Blames Woes on Banning of Tokenization
In response to questions from Forbes, the project confirmed that it has been processing refunds since last year. However, it chose not to make the reimbursements public, instead keeping communication with its backers private.
As noted by the publication, Flowcarbon faced the same obstacles as several other crypto-carbon initiatives that came before it. For instance, in 2021, Toucan and KlimaDAO tokenized millions of retired carbon credits, sparking concerns about double counting from registries.
In response, Verra, one of the largest greenhouse gas crediting organizations in the world, banned the tokenization of retired credits the following year. The decision then became an impediment to Flowcarbons token generation plans, sparking frustration among its financiers.
Interestingly, despite the ongoing refunds, the startup has maintained a business-as-usual attitude. Its latest social media post announces its upcoming CarbonSmart summit, scheduled for September 23. One of the key topics to be addressed at the event appears to be carbon financing.