Running Tide, a carbon removal startup that signed 25 customers including Microsoft, Shopify and Stripe, is shutting down after failing to secure more financial backing.
The announcement by CEO Martin Odlin in a June 14 post on LinkedIn came just three months after Running Tide touted a successful trial that sequestered 21,000 metric tons of carbon dioxide in biomass sunk deep in the Icelandic ocean. Its early customers received offset credits for that work.
Ultimately, the company’s two dozen customers weren’t enough to attract the additional funding Running Tide needed to scale up. There is interest in Iceland, Norway, Japan and Canada, but more clients are necessary, particularly from companies in the U.S. “The problem is the voluntary carbon market is voluntary, and there simply isn’t the demand needed to support large-scale carbon removal,” Odlin wrote on Linkedin.
Running Tide was an early pioneer in carbon removal technologies centered on speeding up the ocean’s ability to absorb carbon dioxide from the atmosphere via floating kelp farms. It was working on multiple approaches, but is chiefly known for sinking biomass, such as forestry waste, into the ocean — avoiding the emissions that would be released if that material was burned.
The company was relatively quiet about its fundraising, but its $54 million Series B round was led by investor Chris Sacca’s firm, Lowercarbon Capital. Running Tide used that money to quadruple its staff to about 120 scientists, carbon accounting, forestry, sensor and software experts that could help build software to verify the Running Tide’s claims. Revenues were undisclosed.
It was among the best-known companies using the ocean for carbon capture, and it handled Microsoft’s first experiment with ocean-based carbon removal methods. “This agreement represents a joint investment in an abundant future both in removing a significant amount of carbon while restoring ocean health for future generations,” Odlin said at the time.
In 2023, $1.2 billion was invested in early stage carbon removal startups, with about $63 million going to ventures working on ocean-based approaches. With hundreds of startups vying for customers, the space is ripe for consolidation. “We expect more [startup failures] to happen in the coming months and years,” Nan Ransohoff, head of climate at Stripe and lead for Frontier, a $1 billion carbon buyers group, said on a recent podcast. “That’s just a sign of what an early ecosystem looks like.”
In the next episode of Climate Pioneers, I’ll speak with Ransohoff about how Frontier pools expertise to evaluate risky startups. The conversation will cover which solutions are gaining traction, lessons learned during the first two years, and how Ransohoff juggles governance responsibilities between Stripe and Frontier.
Register to join live at 1 p.m. ET July 17 or watch the recorded interview.