Carbon Reform lands $3M seed round
WILMINGTON – Carbon Reform, a startup working on carbon capture and air quality technology for commercial HVAC units, has closed a $3 million seed investment round.
Founded in 2020 by University of Delaware alumni Jo Norris and Nick Martin, Carbon Reform has quickly racked up several competitive grant wins and accelerator entries, but its seed funding round will give it the financial runway toward commercialization of its technology.
The investment round was led by Azolla Ventures, a climate technology-focused venture capital fund created by the nonprofit Prime Coalition, that invests in early-stage technology companies with the potential for gigaton-scale climate impact. Other participants in the round include the venture capital funds Virya LLC, which targets climate-focused startups; Revolution’s Rise of the Rest Seed Fund, which invests in startups outside of traditional innovation hubs; Plug and Play Ventures, a major venture capital platform; and Gaingels, which invests in LGBTQ-led companies. Also investing locally was Preston Schell, co-founder and president of the Ocean Atlantic Companies, which develops and manages commercial properties.
“Azolla Ventures is proud to lead Carbon Reform’s seed round and support the company’s efforts to tackle greenhouse gas emissions from buildings,” said Amy Duffuor, general partner at Azolla Ventures and member of Carbon Reform’s board of directors. “Carbon Reform’s modular carbon capture system is a gamechanger.”
The startup has designed a proprietary Carbon Capsule unit that retrofits into any HVAC unit, and screens a portion of a commercial building’s ventilated air for carbon dioxide and other pollutants. That captured gas and particulates is combined with lime to produce a carbon-negative limestone solution that is pushed out of the unit.
“One of the reasons that a lot of buildings have ventilation systems that work constantly and use a lot of energy is because they’re primarily trying to expel CO2. So, by reducing the amount of CO2 inside of the building, and also reducing the amount of other common contaminants, we’re able to safely recirculate the air inside the building,” explained Norris, a materials engineer and climate scientist.
Norris and Martin, both of whom have been named DBT Top 40 Under 40 honorees and were named to Forbes’ Top 30 Under 30 this month, always recognized the potential for carbon capture in office buildings where large numbers of people work, but their launch in February 2020 proved to be serendipitous.
“The pandemic definitely shaped how we thought about this problem,” Norris said, explaining that many landlords were told to just ramp up ventilation of their buildings to help dilute any potential airborne transmission of COVID-19. “Everyone’s interest in indoor air quality started to increase and that was when we saw we could combine the problems and actually make it a better product for the customer.”
While much of the carbon capture market is aimed at output from heavily polluting industrial plants, the scale of ambient CO2 pollution from non-industrial sources is sizable as well. To date, climate-friendly solutions for such owners are largely relegated to the carbon credit market, which can be volatile. Norris believes Carbon Reform’s technology will bring a much-desired product to market for customers to utilize, improving air quality for tenants and significantly reducing their energy costs and carbon footprint.
With its seed funding in hand, Carbon Reform intends to pilot at least two commercial installations in the next six months. It will also aim to double its current staff of seven, adding those with experience in chemicals, product design, HVAC and installation as well as more corporate roles like finance, Norris said.
Today, Carbon Reform leases space at the Delaware Innovation Space on the DuPont Experimental Station but also has space in Philadelphia, where it is looking to put more permanent roots. Norris said the firm expects to always keep some presence in Delaware, where it was founded and supported through state grant programs.
The seed funding will give Carbon Reform at least 18 months to test its technology and begin establishing partnerships toward commercialization, when a Series A fundraising round would be necessary, Norris said.
“We have to set up an entire supply chain, we need to set up logistics and make sure that we’re maintaining these devices for our customers. But in doing that, we’re actually accessing an extremely large market of about $600 billion dollars of commercial real estate globally,” she said.