The Seattle-based carbon removal marketplace has officially shut down after operating for seven years. Nori was using blockchain technology to track carbon credit sales and ensure transparency. But uncertainty about how to quantify and credit carbon removals led to its demise.
Nori had raised a total of $17.25 million from investors and in 2023 secured a $14.4 million agreement with Bayer for 400,000 acres of farmland.
The closure is the second major collapse in the carbon credit industry in 2024. Running Tide, an ocean carbon removal company, announced its shutdown in June 2024 after operating for seven years. The company, based in Portland, Maine had raised over $50 million from investors and blamed its shut down on lack of demand from the voluntary carbon market.
Agtech failures in 2024
- Gro Intelligence, which provided climate and agricultural data insights, shut down. Its assets have since been bought by Almanac.
- UK-based Small Robot Company entered liquidation after failing to secure necessary funding.
- Ynsect filed a safeguard plan after failing to find enough financing for its expansion plans.
- Indoor farming company Bowery Farming, once valued at $2.3 billion, ceased operations.
These collapses perhaps signal deeper issues within the carbon removal industry and may affect investor confidence in the sector. Although there is some hope that the new international carbon trading rules agreed at COP29 will allow more agri-tech companies to participate in carbon credit trading and create new revenue streams for businesses that implement sustainable agricultural practices that reduce emissions or enhance carbon sequestration.
Misallocation of funds is still worrying investors
These closures also come as the investment community licks its wounds after a three-year global capital drought. While most recent data points to confidence returning, fundraising is a challenge for venture capital investors as is finding exits in the those companies they invest in.
Speaking during a panel discussion at the recent World Agri-Tech Innovation Summit in Dubai, Paul Rous, partner at investment firm Natural Ventures, said that misallocated funds still risk jeopardising returns for investors subsequent industry growth.
“There is a lot of capital in climate and impact that is going to things that are ‘shiny’ and things that I find it very hard to believe are going to have a significant impact in any positive way in the agri-food supply chain.”
The failure of Nori, he said, is just another example of a “shiny, AI carbon marketplace digital solution that is trying to tap into an unregulated market.
I think a lot of capital is going to a solution in agri-food that is just focussed on digital. We need a lot more hard tech, deep tech solutions that are more long term.”
VC is by its nature very risky, he added. “We need to have the courage to be able to deploy capital into things that need a long-termist approach.”
