WeWork Founder’s Flowcarbon Refunds Investors as Carbon Credit Token Fails to Launch

TLDR:

• Flowcarbon, co-founded by WeWork’s Adam Neumann, is refunding investors after failing to launch its “Goddess Nature Token” (GNT)
• The company cited market conditions and resistance from carbon registries as reasons for the refunds
• Flowcarbon raised $70 million in funding, including $38 million through token sales
• Investors like Andreessen Horowitz waited over a year for the token launch
• The voluntary carbon market faced challenges, including investigations into the quality of carbon credits

Flowcarbon, a blockchain-based carbon credit platform co-founded by former WeWork CEO Adam Neumann, has begun refunding investors after failing to launch its “Goddess Nature Token” (GNT).

The startup, which aimed to merge carbon credits with blockchain technology, raised $70 million in funding from high-profile investors like Andreessen Horowitz in May 2022.

According to recent reports, Flowcarbon has been quietly issuing refunds to token buyers who have waited over a year for a launch that never materialized. The company cited challenging market conditions and resistance from carbon registries as the primary reasons for the setback.

Flowcarbon’s spokesperson stated,

“It’s well known that since last year we have been offering refunds to retail GNT buyers due to the industry delays, with standard and customary terms, as we continue to grow Flowcarbon as a leader in carbon finance.”

Tokenization Challenges in the Carbon Market

The concept behind Flowcarbon’s GNT was to tokenize carbon credits, making them more accessible to a broader range of investors. Each token would have been backed 1:1 by carbon credits, which represent a metric ton of carbon dioxide removed or prevented from entering the atmosphere.

However, the tokenization of carbon credits has faced significant challenges. In November 2021, before Flowcarbon’s public launch, Verra, a prominent carbon registry, cautioned against the practice of tokenizing retired carbon credits. This warning came amid concerns that the value of these credits could be counted twice.

In May 2022, Verra announced a complete ban on the tokenization of retired credits to prevent fraud and maintain environmental integrity. This decision had a chilling effect on Flowcarbon’s plans, contributing to the repeated delays in the GNT launch.

Market Volatility and Investor Concerns

As launch dates were pushed back throughout 2022, investors began to express frustration. The voluntary carbon market, which had grown to approximately $2 billion in 2021, faced its own set of challenges.

Investigations into the quality of carbon credits revealed that some projects had exaggerated their benefits or failed to remove carbon dioxide from the atmosphere as claimed.

These revelations led to a significant drop in the value of carbon credits in 2022, further complicating Flowcarbon’s plans. In July 2022, Flowcarbon CEO Dana Gibber told the Wall Street Journal that the launch had been paused to “wait for markets to stabilize.”

Refund Process and Future Outlook

As part of the refund process, GNT purchasers were asked to sign a release including a broad waiver of claims against Flowcarbon and its affiliates, as well as confidentiality terms. The company has not publicly disclosed information about the refunds on its social media platforms or website.

Despite the setback with the GNT launch, Flowcarbon appears to remain active in the climate industry. The company continues to position itself as a leader in carbon finance, though the exact nature of its current projects and future plans remains unclear.