Other commitments came from Carbon13, Climate VC and Echelon Capital.
This equity injection will help Kita accelerate its product build and hiring efforts to support the launch of carbon insurance products.
Kita was founded to tackle the biggest issues in climate change, which are stopping carbon emissions and removing existing carbon emissions from the atmosphere. The InsurTech company is focused on carbon removal, insuring “carbon delivery risk” to enable carbon removal solutions to scale.
Kita claims that most carbon removal solutions generate revenue by selling carbon units on the voluntary carbon market. To meet net-zero targets, this market needs to grow by over 15-times by 2030. There is a lack of transparency and consistent risk management, which is creating significant transaction risk and preventing growth.
As a result, Kita’s insurance products cover carbon delivery risk, removing a significant protection gap for both buyers and sellers in the market. By removing the risk, carbon removal projects can reach a higher price and attract inward investment.
Kita co-founder and CEO Natalia Dorfman said, “The world is in a climate crisis, and carbon removal is an essential part of the solution. However, carbon removal is new, faces unique risks, and lack of insurance to address these risks is holding back development at the rate the world needs. Kita believes insurance is a crucial enabler – by removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon removal projects scale.
“We are passionate about bringing these dedicated carbon insurance products to market and we are thrilled to be working with Insurtech Gateway to do it at speed.”
The world needs to remove billions of tons of CO₂ annually for the remainder of the 21st century to enable a liveable and sustainable future, according to the Intergovernmental Panel on Climate Change.
Kita stated that annual human consumption of oil and gas products is 20 billion tons. It stated that if a trillion-dollar oil and gas industry emits 20 billion tons, a trillion-dollar carbon removal industry will be needed to remove it.
To ensure the removal industry can scale at the necessary speed, there needs to be adequate insurance to support it.
Speaking on its investment Insurtech Gateway co-founder Stephen Brittain said, “Kita has found a very interesting role for insurance to play in accelerating the growth of carbon removal markets, and we believe the Kita team are the best people for the job. We are excited to help them get their product into market.”
Climate change has become a major trend in FinTech. RegTech firm ACA Global recently examined the biggest trends of 2022, with ESG being one of the core developments.
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