In a twist of fate reminiscent of Silicon Valley’s boom-and-bust cycles, Flowcarbon, a climate tech startup co-founded by Adam Neumann, the former CEO of WeWork, has hit a significant snag.
The central conceit behind Flowcarbon involves the tokenization of carbon credits, which would enhance liquidity, accessibility and price transparency in what Neumann described as an “opaque and fractured market infrastructure.” Whatever that means.
Carbon credits are a system that allows companies or organizations to offset their greenhouse gas emissions by purchasing credits from projects that reduce or capture emissions elsewhere. Each credit typically represents one ton of carbon dioxide or its equivalent.
These projects can include reforestation, renewable energy, or methane capture efforts. Companies that emit more than their allowed limit can buy carbon credits from others that emit less or from projects that actively remove carbon from the atmosphere. The goal is to create a financial incentive for reducing overall emissions and combating climate change.
This approach was about environmental impact. It was also about leveraging blockchain technology to create a new market dynamic for carbon credits. The startup managed to attract significant investment, with at least USD$38 million coming from the sale of its “Goddess Nature Token” (GNT), designed to be equivalent to a carbon credit.
However, despite the initial hype and funding, Flowcarbon failed to launch its GNT.
Reports surfaced in early September 2024 that the company was quietly refunding investors. This decision came after years of delays, attributed to market conditions and resistance from carbon registries. The process involved investors signing confidentiality agreements and waiving claims against Flowcarbon, indicating a desire to manage the fallout discreetly.
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Adam Neumann has had a number of high visibility flops
Despite its best efforts, the news of Flowcarbon’s refund initiative quickly spread across platforms like X (formerly Twitter), sparking a mix of surprise and cynicism among users and industry observers.
Some pointed out the irony of a venture aimed at combating climate change potentially increasing energy consumption through blockchain maintenance. Others noted a familiar pattern in Neumann’s ventures, from WeWork’s tumultuous path to FlowCarbon’s current troubles, raising questions about the sustainability of his business models.
And there’s good reason for that. Adam Neumann is known for several high-profile business flops.
WeWork’s rapid expansion under his leadership led to financial instability and a failed IPO in 2019, forcing Neumann to resign as CEO.
Furthermore, his earlier projects, like the luxury wave pool company Wavegarden and a shared-living concept called WeLive, also struggled.
WeLive, an extension of WeWork that offered communal living spaces, never gained significant traction and quietly faded. Additionally, his push for WeGrow shut down after a short run. WeGrow was an educational initiative aimed at creating schools based on WeWork principles.
Critics often point to his erratic leadership style, reckless spending, and questionable business practices. His ventures have consistently raised concerns about their sustainability and long-term viability.
In July 2022, CEO Dana Gibber told the Wall Street Journal that the company paused its token launch to “wait for markets to stabilize.” This decision followed the crypto market’s implosion due to the FTX fallout, and a warning from prominent carbon credit registry Verra against tokenizing credits, which are typically retired after purchase.
As many countries strive for carbon neutrality, investors have found the traditional carbon credit market increasingly lucrative. In 2022, the market’s value surpassed USD$330 billion.
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