Sylvera Fund Raising of $32 Million Will Enhance The Integrity Of Nature-Based Carbon Credits

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Sylvera Fund Raising of $32 Million Will Enhance The Integrity Of Nature-Based Carbon Credits

On January 25th, carbon markets solution provider Sylvera announced that it had successfully completed a Series A funding round, with a total investment of $32 million. The round was led by Index Ventures, a European venture capital firm with over $4 billion of asset under management, and also included Insight Partners, Salesforce Ventures and Local Globe. Having been founded in 2020, Sylvera is a rapidly growing start-up with more than 80 employees. The latest funding round closed less than a year after the $7.8 million seed round in May 2021. The COP 26 agreement on carbon credit accounting rules has facilitated investment decisions for carbon markets businesses.

Sylvera’s solution enables users to track and monitor the quality of their carbon credits linked to the nature-based projects they originate from. The data that underlines Sylvera’s model is generated using globally sourced satellite imagery from US, EU and Japanese space agencies. Powerful machine learning techniques can identify changes that have happened on the ground at project sites such as wildfires and illegal logging. The information can then be analysed and rated against the project’s initial carbon credit accounting process to provide validation of the project’s performance. Sylvera will then provide a rating for the project quality between AAA-D. The investment is intended to help Sylvera scale up in line with forecasted growth of the overlapping Article 6 and voluntary carbon markets. Based on disclosed trades, the voluntary carbon market exceeded $1 billion of transactions in 2021. By 2030, the value of transactions in the voluntary carbon market is forecasted to grow to at least $7 billion and potentially $14 billion. Sylvera sells the carbon credit project data to buyers of carbon offsets, carbon traders and project developers.

Verdantix believes that satellite analytics will have three impacts on the carbon market. First, higher quality, more granular data from the imagery will expose underperforming projects. This is bad news for sustainability leaders who have bought credits from underperforming projects. Issues around project liability may prove to be an expensive thorn in the side of project developers. Second, improved data could create dwindling responsibilities for the current carbon project verifiers like BSI and Bureau Veritas who typically check on project performance once every three years which offers weaker quality guarantees than daily or weekly satellite verification. Third, satellite analytics will improve the integrity of the new nature-based offset projects as frequent verification gets baked into methodologies. If firms like Sylvera can demonstrate the value of their technology, satellite analytics could be enshrined in Article 6 project methodology rules which are due to be finalized at COP 27 in Egypt.

Guy Lewis

Industry Analyst

Guy is an Industry Analyst in the Verdantix ESG & Sustainability practice. He currently leads research on circular economy software and services and supports research across several other ESG and sustainability themes. Prior to joining Verdantix, Guy was an energy specialist helping to optimize member experience, through which he gained knowledge of both operations and smart technologies. Guy holds a BA in Geography from the University of Manchester, with a placement year at the University of Queensland.