Y Combinator is a renowned startup accelerator in Silicon Valley whose alumni include Airbnb, Dropbox, and Coinbase. They recently put out a call for startups focused exclusively on carbon removal.
Full Transcript
Ross Kenyon: Hello and welcome to Carbon Removal Newsroom. I am Ross Kenyon, lead strategist at the Nori Carbon Removal Marketplace. Today I have with me Gustav Alströmer from Y Combinator, the startup program. They have been, how should I even say this, Gustav? You’ve been interested now in investing in carbon removal technologies. We saw a post go up about this, a page that I’ll link to in the show notes. But where did this come from? Because this was a very pleasant surprise for us.
Gustaf Alströmer: Sure. Thanks for having me. So Wycombe is a startup program here in Montevideo, San Francisco. We every now and then put up this thing called Request for Startup. Request for Startup is our way of inspiring founders to work on We actually consider every idea. Sometimes it actually helps from us to tell the world that We look at very specific things to make people understand that we actually look at everything. So one of the things we started talking about about a year or so ago, probably a bit more than that now, was carbon removal technologies, which is something that we spent looking at internally for some time.
And we wrote a request for startup around carbon removal. The response was super positive. I would say we probably had... 50 or so applications in that next batch from founders. We had very good response from both investors and from press. And the one that I’m excited about, we had lots of software engineers that work for software startups that just emailed out and said, hey, I want to work for a company that works on carbon removal or on climate change. Where should I go and work? So all of those things were very, very positive things.
Now, we fund all kinds of companies. So this is not a sort of like a main focus of us. This is one of the things that we do. But so far, the response has been really good.
Ross Kenyon: Definitely. And your alumni list is extremely famous and all names that you would recognize at least a few, if not many listeners of the companies that have gone through Y Combinator’s program. So I imagine that anyone who does make it into Y Combinator’s carbon removal technologies, requests for startups and subsequent program would be someone to keep an eye on. Do you think this is a general trend, Gustav? Do you think that there will be more Silicon Valley investment in carbon removal?
Gustaf Alströmer: Well, it’s super hard to say. I would say that Wicom Air is so early, both in sort of like the ecosystem of startups and in the level of risk that we take, that we will fund the things from the very beginning. So even if there isn’t a market today or even if there isn’t consensus that something will take off, we will still fund those kind of ideas. I think that there will be, as a result of climate change, a huge need from governments, from states, from companies and eventually individuals. There’ll be a need from them to pay for solutions to fix this climate change.
And I’m convinced, like you guys are, that those solutions are not just decarbonizing the way we live our lives, but actually also removing carbon from the atmosphere. To what extent that is a functioning market today, it might be too early to say. But it doesn’t mean that we shouldn’t invest in the companies that create that market or bring down the cost of what it costs to remove carbon. And that’s sort of the way we view it. We have many other examples of things we invested, funded early on where there wasn’t a clear market when we funded them that it was still the kind of risk we wanted to take.
So I’m not too worried about that. I’m more worried about finding great founders and great entrepreneurs to start these companies. And that’s sort of where we put our focus right now.
Ross Kenyon: Seems like a wise strategy. I’ve noticed, I mean, Nori focuses quite exclusively on pulling carbon dioxide out of the atmosphere through regenerative agriculture and the future direct air capture and those applications. But I noticed you listed a number of things that are conventionally lumped under geoengineering on here too. What led to that?
Gustaf Alströmer: You’re talking about carbon. ycarbon.com. I’m actually not the author of any of those things, but the purpose of those things was to inspire people to think very widely about what kind of solutions that could apply to remove carbon. And the things that are known to people are things like reforestation or brickyard capture. But there are lots of areas where there just isn’t that much work known, especially in the commercial sector. And the goal was to inspire people to work on submitting ideas that we hadn’t heard of before. For sure, reforestation, regenerative agriculture, or direct air captures should be on that list of three things that we want to inspire people to apply with.
The goal of those specific posts was to kind of think a bit wider than just those three things.
Ross Kenyon: Definitely. And I like the general creative approach to it, too. We don’t know everything about how the world works, which is often used as a good reason to not intervene in these complex systems. But there is room out there to hopefully experiment in some limited ways where, I don’t know, people disparage the techno fix mentality. But there may be a couple of diamonds in the rough here that are worth at least looking into. I mean, given the amount of impact they could have on the planet, what We should know about all of these options.
And that’s sort of the approach that you’ve taken, it looks like.
Gustaf Alströmer: Yeah, I mean, I can’t say that I have spent years and years and years trying to figure out the right model here. But here’s sort of generally how I think about it. The world will have an interest in paying for some of these things. The way they will pay for that will be a dollar value per ton of CO2 removed, similar to you guys do. And there has to be some level of trust involved. And that the CO2 was actually removed. And sometimes the trust can’t be 100%, but the companies or the technologies that are being presented should both fit, in my opinion, fit into that model.
And it has to be able to provide some level of trust that the carbon was actually removed. Now, beyond that, what kind of technologies should we go after and try or whether it’s not even like it might be bioengineering or things we haven’t thought of? It’s not really up to us to say we really want to be we want to learn about the world when someone comes in and pitch us. And we don’t want to know more about anything than any of the founders that are applying to YC. That would be a bad sign.
We want them to know more about the specific topic that they’re going after. So as long as you have some unique insight about something that at high level of trust, you can measure that the carbon has been removed from the atmosphere and you fit into that model of a dollar value per ton, then you should apply. And I believe that eventually there will be a market for that kind of technologies. It might plug into a marketplace, it might plug into something else, but I believe that we should look at everything.
Ross Kenyon: Great. And is there a certain amount set dollar wise or number of companies that you’re creating a portfolio for for carbon removal technologies? Or is it quite integrated into your normal business practices?
Gustaf Alströmer: It’s very integrated. We don’t have a specific dollar amount set. My early observations is that we need a lot more founders to start these companies. That is the missing link. I’ve seen enormous amount of interest from investors, from press and media, almost too much. We just didn’t have enough founders applying with those ideas. I mean, we had many, many thousands of applications last batch and only about 50 or of them were focused on carbon and mobile. So we wanted a lot more.
Ross Kenyon: Well, if you’re listening out there and you’re thinking about starting a carbon removal business, if you already have one, it looks like Y Combinator may be a viable option to you. Gustav, thanks to you and your team for the leadership here. I’m glad. I mean, Y Combinator is well known even among people who are not in tech. Like my wife knew about Y Combinator and I was surprised. I was like, oh, okay. But I guess if you’re only going to know why. Y Combinator is the one to know. So thanks for planting a flag here and saying carbon removal is important.
And we will keep an eye out for any companies that come through your program. Those are definitely companies to watch, in my humble opinion.
Gustaf Alströmer: Thanks so much for your time. And thanks for all the work that you guys do at North.
Ross Kenyon: Thanks, Gustav. If you like the show, please subscribe, share it with your friends, give us a great rating and review on iTunes. That would be much appreciated. And we look forward to speaking with you again next time on Carbon Removal Newsroom.
