Klarna drops half a million for startup’s groundbreaking tech to clean the air
Buy-now-pay-later disrupter Klarna has invested a mammoth $500,000 in a WA startup that is changing the game on removing CO2 from the atmosphere.
Buy-now-pay-later disrupter Klarna has invested a mammoth $500,000 in a WA startup that is changing the game on removing CO2 from the atmosphere by going back to basics with the most low-rent way to capture and store carbon — native trees.
InterEarth grows swathes of trees — mostly mallee and eucalypt — then harvests their biomass, placing the carbon back underground using a low-tech, fairly simple method: a vault that is covered with clay.
It’s a new kind of carbon containment that is not only decay-resistant but also requires very little space. Just one hectare of underground storage is required to store some 2500ha of trees, the startup says.
The innovative approach caught the attention of Swedish CO2 removal expert Robert Höglun, who quickly introduced InterEarth founder and CEO Howard Carr to Klarna.
The fintech, which has a global mission to remove 11,587 metric tonnes of CO2 equivalents by 2030, changed everything for his WA startup, Carr tells SmartCompany.
“Our relationship with Klarna flourished from there and we were fortunate enough to be awarded an investment of over $500,000 last year via its Climate Transformation Fund (CTF) to help fund our trials,” Carr says.
Investment like this is crucial, he continues, not only to “credentialise new businesses like ours and provide vital early stage financial and business support” but also to elevate real-world solutions above broad stroke climate pledges.
“Klarna’s CTF commitment is part of its sustainability approach designed to create maximum long-term climate impact,” Carr says.
“Instead of purchasing carbon credits and creating climate neutrality claims, the company focuses on investing in a number of solutions needed to mitigate the worst impacts created by the climate crisis.”
‘Better integrity ACCUs’
Carr was no newcomer to the space. His family has been farming the WA Wheatbelt for generations, living and breathing its low-rainfall, intensely dry landscape. It imbued within him a deep understanding of its agricultural production system, Carr says.
As an adult, he worked as CEO and non-executive director of several mineral exploration companies in Australia, Africa and Canada, as well as in resources at Macquarie Bank. But it was during his stint at the WA Department of Agriculture that Carr began to ponder alternative land use for low rain areas.
Thus, InterEarth was born — a “product of my different learnings from engagements with the local native fauna, agriculture, mining, chemistry, hydrology, business analysis and corporate deals”, he says.
The beauty of the startup’s method, Carr says, is its ability to regenerate itself thanks to the root of the trees remaining in the soil. He explains: “The harvested trees regrow, and are re-harvested every two years, resulting in a near-continuous and voluminous stream of biomass for processing, storage and carbon sequestration”.
That shorter lifespan also means the Australian Carbon Credit Units (ACCUs) that InterEarth plans to sell can be far more reliable than regular sections of existing forest or farmland.
“Wild fire risk is eliminated for our carbon credits,” Carr says “because we are only credited for carbon in harvested biomass, removed from our plantation and stored in fireproof chambers covered with at least a metre of clay.”
Since last year InterEarth has over 230,000 seedlings that will be planted across 400 ha of land, but the ambitious team have set a goal of scaling up the program to reach 5,000 ha next year.
‘Data leads to investment’
But InterEarth’s growth was all only made possible by “the pre-purchase support” from Klarna, which Carr describes as a “great way to support innovation without the governance complications of taking equity”. Insurance giant Zurich has also pitched in with an investment.
“Traditional venture capitalists often appear to underestimate technological challenges of achieving global net zero and the importance of supporting new climate-tech startups,” he says.
“Traditional risk-reward evaluation criteria appear to be rigidly applied, without due regard for the looming net zero deadline”.
When asked what advice he would give to other climate startups seeking funding from the cashed-up and environmentally-conscious heavy hitters like Klarna, Atlassian, or Canva, he said the proof is in the pudding.
“Be rock solid on how your impacts will be measured and verified,” Carr says.
“The less reliance on modelling and assumptions, the better.”
