Nori

Early Stage

Nori is on a mission to reverse climate change.

Analytics

Raised to Date: Raised: $145,549

Aggregate Commitments $

Platform

Republic

Start Date

09/05/2018

Close Date

12/31/2018

Min. Goal

$50,000

Max. Goal

$1,070,000

Min. Investment

$10

Security Type

Debt

Funding Type

RegCF

Rolling Commitments $

Status
Funded
Reporting Date

01/31/2019

Days Remaining
Funded
% of Min. Goal

291%

% of Max. Goal

14%

Likelihood of Max
Funded
Avg. Daily Raise

$1,244

# of Investors

368

Momentum
Funded
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Location

Seattle, Washington

Industry

Energy, Power, & Natural Resources

Tech Sector

Nori is a blockchain-based marketplace for reversing climate chain. They remove carbon dioxide from the atmosphere by using NORI tokens as a medium of exchange for Carbon Removal Certificates (CRCs). So far, they’ve been featured in Fast Company, GreenBiz, GeekWire, New Food Economy, CleanTechnica, Virgin Unite, and Sea Change Radio. Their podcast has over 35 episodes and is the leading podcast on carbon removal. Plus, the team has deep experience; Nori’s founders and advisors have “...more combined experience in carbon removal than any other team on earth, having developed cutting edge technologies and founded key initiatives in the space.”
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Analyst Report Analyst Report Methodology Article

Summary

Raised $108,913 as of December 4th, 2018

Nori has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10-20% of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com.

Problem

One of the largest issues that we all have to face today is the results of climate change and the decay of our planet due to the excessive amount of carbon dioxide accumulating in our atmosphere, land, and oceans.  

Human greenhouse gas emissions, including methane and carbon dioxide, have already warmed our planet more than 1 degree Celsius compared to pre-industrial levels. This has resulted in visible changes in weather patterns, agriculture, sea levels, and so much more.  

Since the industrial revolution, carbon emissions have only been increasing exponentially – so far, we have emitted about 40 billion tons of carbon in addition to the carbon that has already been accumulated.

While 55% of the carbon we emit is eliminated by land plants and the ocean, 20% of the remaining carbon can linger in our atmosphere for thousands of years negatively impacting our planet and all the living organisms on it, including us.

While certain amounts of carbon dioxide are necessary in our environment to help regulate Earth’s temperature, this excessive build up of carbon over the years is causing the ocean’s acidity levels to rise, nutrients to disappear, plants and trees to be more prone to drying and catching on fire, and so many more detrimental effects.

 According to scientists, Earth’s temperature will increase at least another 0.6 degrees Celsius with the CO2 already present in our atmosphere, not to mention the fact that we will continue to emit more carbon into it, further destroying our planet.

 Many realize the pressing nature of this issue and the short window of time we have to actually act and make a difference. It is common knowledge in the science community that we need to remove 15 billion tons of CO2 from the atmosphere every year by the end of the century in order to prevent global warming from exceeding 2 degrees Celsius.

 There have been attempts to meet this goal with pledges from different countries as well as the Paris Climate Agreement and the technology to begin removing carbon does exist – the problem boils down to the fact that it is not happening at a large enough scale to have an impact.

Solution

Nori is on a mission to reverse climate change. By creating a way for anyone in the world to pay to remove excess carbon dioxide in the atmosphere, their model shows promise of not only expediting the process, but also creating a financial infrastructure that could incentivize carbon removal at a larger scale. 

Nori uses blockchain technology, creating asset-backed tokens, each representing one tonne of CO2 emissions. These tokens can be bought and sold on Nori’s credit marketplace, which not only acts as third party verification, but also connects buyers and sellers of credits in a single marketplace.

Removal of CO2 from the atmosphere is rewarded with Nori tokens, and corporations and individuals alike can sell/purchase credits based on the amount of carbon that they need to emit or on the amount of carbon that they are able to sequester.

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Nori’s business model is based on the premise that the increased liquidity and value of carbon credits, granted by high participation from buyers and sellers as well as from its marketplace, can better incentivize companies to invest in reducing its carbon footprint and reward companies who are already responsible with their emissions.  

While the company hopes to expand its token usage into many different forms of carbon removal, Nori plans on focusing its initial market penetration on the agricultural industry’s willingness to participate in its program.

 Fortunately, the agricultural industry already has a few incentives to join – CO2 trapping practices like no-till, cover cropping, and crop rotations are also conducive to lowering water consumption/wastage. Farmers who adopt/have adopted these practices may be highly incentivized to participate in Nori’s marketplace.

Difference from Carbon Credits  

Tradable carbon credits as a concept have been around since the Kyoto protocol in 1970, and consumer-friendly carbon-offset companies have become more and more popular. However, current methods of involving individuals and businesses in carbon offset programs are usually one dimensional, with buyers purchasing offsets from websites without knowing who and how their offsets are being generated.

This is where blockchain technology gives Nori the advantage over traditional offsets. By creating a marketplace, Nori is effectively eliminating the middleman, connecting those who offset CO2 and those who would like to offset their CO2 directly.

Blockchain is easily transferable, trackable, and cannot be easily manipulated or altered. This introduces a level of personalization to the carbon credit market, and allows for increased liquidity.

Even more Nori’s model for its token usage is much better at incentivizing all businesses to act responsibly. Traditional credit markets are better at helping companies that are exclusively geared towards constructing new solutions for reducing carbon footprints, like planting trees or supporting farmers who are unwilling to sell their land to deforesters.

While these organizations whose only purpose is to reduce CO2 are important, Nori is able to access a different market – companies whose primary purpose is not to reduce CO2. By putting a price on one tonne of CO2, all companies that emit CO2 are incentivized to rethink their strategy regarding their emissions and potentially invest in green technologies.

Why We Like it

  1. Untapped market: By combining the use of blockchain cryptocurrency and the pressing issue of climate change, Nori is creating a space for themselves in a whole new market. With no competitors as of yet, the dire need for this kind of a platform, and the incredible growth of cryptocurrency – with a market valuation set to hit $1 trillion this year – there is huge potential for success for Nori.
  2. We know the current downturn of crypto markets has some scared, but this is a long game and one that cannot be dictated by near term outcomes driven more on market sentiment and lack of understanding.
  3. Additionally, this value proposition will attract new entrants on both the supplier and buyer side. The founder and CEO of Nori, Paul Gambill, explained in a phone interview that not only is Nori working to begin removing all the carbon that has been accumulated over the years, but also to counter the additional carbon output each year – working hard to restore atmospheric carbon to pre-industrial levels.
  4. With so many methods already existing to remove CO2, ecological, industrial, and hybrid, and so much carbon to remove, there is a huge market opportunity for Nori.
    Utilizing blockchain technology: Through the use of blockchain, Nori provides a more secure payment platform and a more reliable carbon accounting. Without having to deal with other complex, risky CO2 markets, Nori gives themselves an edge in allowing buyers to pay for already verified carbon removal processes with simple transactions.
  5. Nori is perfecting a process that begins by issuing Carbon Removal Certificates (or CRCs) to suppliers who are already removing carbon from the atmosphere. These suppliers can then put the CRCs up for sale in the Nori marketplace where buyers can purchase them in exchange for Nori tokens that can be cashed out or exchanged for another cryptocurrency.
  6. Nori is creating a space for 500 million tokens – 6 million of which will be offered for sale in their current crowdfunding campaign and 250 million of which will be sold after the Nori marketplace has launched in Q1 of 2019.
  7. One Nori token can pay for removing one tonne of CO2 from the atmosphere. The price of the token will change over time as demand for removing carbon changes and as this price increases, so will the incentive for people to remove even more carbon.

    Benefitting all sides: Not only are everyday people incentivized to help remove carbon and given the power to help reverse climate change, but suppliers can benefit from this exchange as well. Suppliers of the CRCs get paid in Nori tokens according to how much CO2 they remove. By monetizing activities they are already doing, this platform might further inspire investments in carbon removal.

  8. Buyers of the Carbon Removal Certificates can use these certificates to prove that their method of removal has been verified. A market system like this benefits both sides, since sellers make money, buyers are able to lower their carbon footprint indirectly.
  9. In fact, this market system is also beneficial for peripheral companies. If/when Nori grows large enough, companies who originally offered CO2 services can instead list their credits on the marketplace and still maintain their businesses. In fact, with enough participation in Nori’s marketplace, their businesses may actually grow from access to a larger consumerbase.
  10. Companies that specialize in CO2 offset verification also largely benefit from Nori. Given that Nori’s token increases the market’s interest in CO2 offsets, suppliers who wish to supply their tokens on the marketplace will all need verification of CO2 reductions, and therefore dramatically impact demand for verification.
  11. Nori is not in the business of CO2 offsetting, but rather in the business of facilitating exchange of offsets. By improving the medium by which offsets are traded, it can grow the entire CO2 reduction industry, rather than merely taking market share from other socially impactful companies.
  12. Solving real issues: More than anything, Nori is a viable platform and business model because of the real and necessary issues they are solving for. Shortly after founding Nori, the company won the ConsenSys Blockchain for Social Impact Hackathon, already making a name for themselves and proving that they are providing a solution that can have a real impact on our world and lives.
  13. They are not only trying to bring about change through their blockchain model, but have also hosted the first-ever “Reversapalooza” conference to talk about carbon removal, have a Nori podcast, newsletter, and blog – all dedicated to talking about the issue of climate change and ways to take action and find a feasible solution.
  14. Backed by a strong team: Not only does Nori have an incredibly diversified team ranging from experts in carbon markets and carbon pricing, to the Chief Strategist at the ASU Center for Negative Carbon Emissions, to blockchain community experts, but have also equipped themselves with advisors who are industry leaders in this space.
  15. By making sure that they have some of the most experienced and passionate people working on their company and mission, they are setting themselves up to create the perfect platform, cover all their bases, and make a successful impact.

Risks  

Nori’s business model seems to be well positioned for success – its management team is passionate, driven, and most importantly, very knowledgeable about the CO2 offset market. This has enabled them to find effective entry points into the marketplace like it’s focus on farmers who implement sustainable farming practices.  

However, acceptance into the larger market may be difficult. In states other than California that have not passed cap-and-trade regulations, companies may not have enough incentive to buy tokens to offset their CO2 emissions. Smaller companies that are more concerned with their own growth, and aren’t required to care about their CO2 footprint may disregard this entire process.

Despite this, larger corporations like General Motors, Disney, and Shell are voluntarily moving towards accepting a carbon price. Any one of these companies have the potential to change the market from their sheer volume of demand and can build up Nori’s marketplace with their participation.  

Even if regulations aren’t passed, and companies aren’t required to limit their emissions, society’s cultural shift toward corporate social responsibility and sustainability may be enough to propel Nori to success. But market acceptance and adoption are the largest concern with this investment.

 And the reality is we are in the first inning of blockchain implementation and there is a risk of being too early with a marketplace like this. For this reason, we do want to be clear that the upside is immense but the risk of being too early and struggling from adoption are very real and heightened to other investments we have diligenced in the past.

The Founder  

Paul Gambill is the founder and CEO of Nori – fiercely dedicated to the mission of carbon removal. Having earned a B.S. in Engineering from ASU and a Master of Engineering Management at Duke, Gambill has six years of experience in managing mobile and web application projects for clients including Nike and Starbucks.

In a phone interview with him, his passion was evident – even over the phone – as he spoke about his frustration with the fact that while everyone realizes that the issue of carbon building up in our atmosphere can have drastic effects on our lives and world, nothing was really being done about it.

Paul took it upon himself to use his experience in software production and engineering to create a platform that would help speed up the change. Gmabill believes that with the right infrastructure and incentive, the small efforts that are already in the works can be magnified to a much larger scale and can actually solve the issue of excess carbon by the end of this century.

Rating

Nori is set up to solve serious issues that need to be dealt with and is utilizing an already exploding form of technology – blockchain and cryptocurrency – to meet their end goal.

By verifying existing carbon removal processes and incentivizing just about anyone to pay for these methods, Nori benefits everyone involved with the exchange and nets an overall positive outcome on our environment.

With a strong team, strong model, and an opportunity to make a difference this is an intriguing social impact investment with significant upside, but as a reminder short term viability in such a new market may strain the ability to survive for long term prosperity. Put simply, we worry if they are too early to market.

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