Kita, a London-based carbon credit insurance specialist, has raised £4m in funding to leverage InsurTech solutions to support carbon removal projects.
According to a report from UK Tech News, the round was led by Octopus Ventures, alongside Chaucer Group, Hartree Partners, and existing investors Insurtech Gateway, Carbon13, and Climate VC.
Founded in 2021, Kita protects carbon credit buyers against the risk of carbon sequestration projects failing to deliver expected volumes of high-quality carbon credits.
Kita’s first product, Carbon Purchase Protection Cover, insures the buyer of forward purchased carbon credits against delivery risk, removing a significant protection gap.
For example, a company with a high-integrity net zero strategy might forward purchase carbon removal credits in an afforestation carbon project, with the aim of enabling an environment in which young trees can grow, capturing carbon and generating biodiversity benefits.
Carbon Purchase Protection Cover protects against the risk that the afforestation project doesn’t generate verified high-quality carbon credits.
This could arise due an avoidable loss, such as the forestry project developer making an error in the planting phase, and unavoidable loss such as a natural catastrophe, or rraud or negligence which invalidates the carbon credits prior to delivery.
The funding will go towards the launch of the company’s first product, the Carbon Purchase Protection Cover.
Natalia Dorfman, co-founder and CEO of Kita, said, “To prevent the worst impacts of climate change, we must remove gigatons of CO2 from the atmosphere annually for the remainder of the 21st century.
“This is a mammoth task, and it requires de-risking and access to capital for carbon removal solutions. Insurance can act as a fundamental enabler – by removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon removal projects scale.”
Earlier this year, Chaucer, a global specialty (re)insurance group, partnered with Kita to bring the first of its kind insurance product to the carbon markets.
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