Our May 2023 Newsletter
Why We Invested in Cloverly
By Chris Wu
The Role of Carbon Removal and Voluntary Carbon Markets
Carbon removal technologies are likely to play a crucial role in limiting warming to 1.5°C. In its April 2022 report on mitigating climate change, the Intergovernmental Panel on Climate Change (IPCC) highlighted the need to rapidly deploy carbon removal technologies to counterbalance hard-to-abate residual emissions and meet net-zero targets at a global scale. High-quality carbon credits are necessary in order to scale-up the deployment and operation of carbon removal technologies. Carbon credits enable businesses to make earlier and more ambitious climate commitments by allowing them to reduce their current emissions through offsets. Further, an active market for high-quality carbon credits is necessary in order to catalyze the flow of investments for deploying existing carbon removal technologies and developing new technologies. Voluntary carbon markets (VCMs) allow carbon emitters to offset their unavoidable emissions by purchasing carbon credits generated by projects targeted at removing or reducing greenhouse gasses (GHG) from the atmosphere. Each credit – which corresponds to one metric ton of reduced, avoided or removed CO2 or equivalent – can be used by a company or an individual to compensate for the emission of one ton of CO2 or equivalent gasses. A high-quality carbon credit represents real, quantifiable, additional, leakage-proof, and permanent GHG emission reductions or removals. VCMs represent an important mechanism to scale high-quality carbon credits from $2 billion in 2021 up to $40 billion by 2030.
Solution
Cloverly is an API-first marketplace for high-quality carbon credits, enabling businesses to meet their climate goals by offering seamless access to high-quality carbon removal credits from across the globe. While Cloverly is a marketplace for businesses of all sizes looking to offset their emissions voluntarily, it has seen strong traction in the enterprise segment, with customers across industries from logistics to financial services. Cloverly offers an API that matches any transaction with a carbon offset in real-time. Their API calculates the amount of carbon emissions generated by a particular activity and then purchases an offset instrument that pays for avoiding or sequestering the same amount of carbon elsewhere in the environment. Cloverly’s focus on project quality ensures that every carbon credit meets their criteria for additionality, permanence, leakage and other indicators. All projects listed on the marketplace undergo a rigorous quality evaluation process by climate science experts that look at 60+ quality indicators to pick the best projects in the voluntary carbon market. As a result, only 10% of carbon credits pass through their screening process and are deemed high-quality and eligible to be on their marketplace. Cloverly’s marketplace allows customers to buy both spot and forward credits in one click. That means they can purchase and build an inventory of credits that can be retired when needed to help them manage carbon credit price volatility.
Why We Invested
Our investment and impact thesis are premised on the catalytic role that VCMs are likely to play in the coming years. Active and efficient carbon markets will be necessary in order to create the right set of incentives for the deployment of projects offering high-quality carbon credits and the development of new carbon removal technologies. The rapid development and deployment of carbon removal technologies is imperative to the achievement of global climate goals, it’s estimated that 10 gigatons of CO2 will need to be removed from the atmosphere annually by 2050. As governments and corporations set ambitious climate targets that entail more than just reducing their emissions, the relevance of VCMs will increase. With the use of carbon capture technologies set to increase 13x, driven by the provisions of the IRA, VCM transaction volumes are likely to register exponential growth.
While today’s VCM is growing at a breakneck pace, it lacks some of the fundamental elements required to drive meaningful impact at scale. Cloverly has been addressing these problems surrounding access, ease, trust, and transparency since its inception as the first API in the world for carbon credits. On the demand-side, Cloverly’s approach is characterized by a focus on the enterprise segment, a recent change in strategy for which there is already clear evidence of success. Cloverly has seen strong growth in transaction volumes and customer acquisition, and has signed key partnerships with Visa, American Express, Redwood Logistics, Ecolytiq, and Salesforce. On the supply-side, what sets Cloverly apart is its ability to provide customers access to a vast and diverse, high-quality portfolio of both nature-based and technology-based carbon offset projects from across the globe. Its focus on high-quality offsets and sourcing and verification processes are key, and this was critical to us (and, we believe, to its customers), given the significant challenges associated with tracking and verifying project credentials and performance. Lastly, we believe the team, led by CEO Jason Rubottom, has a strong understanding of the problem and the market, as well as a clear and compelling vision for the company.
Impact
We believe that Cloverly’s marketplace enables both SMBs and large enterprises to effectively offset their emissions through the purchase of high-quality offsets. Purchasing high-quality carbon credits, in addition to eliminating avoidable emissions, plays a critical role in accelerating the transition to net-zero emissions. Making and achieving credible decarbonisation commitments is challenging for businesses, particularly in emissions-intensive sectors. Credits allow businesses to reduce their emissions now through offsets, while taking cost-effective action to reduce future emissions through asset turnover and evolution of their business models. In the longer term, credits have an essential role in offsetting hard-to-abate emissions from products which lack low or zero emissions options. At scale, the carbon removal purchases that transact on Cloverly’s platform can improve the economic viability of emerging carbon capture technologies, thereby catalyzing the flow of capital to that sector. In the case of high quality nature-based offsets, which promote the preservation of natural ecosystems, they direct private financing to climate-action projects that would not otherwise get off the ground. These projects may also offer additional co-benefits in terms of biodiversity protection, pollution prevention, public-health improvements, and local job creation.
Why We Invested In Pear Suite
Community Health Workers (CHWs) are frontline public health workers who typically share ethnicity, language, socioeconomic status, and life experiences with the community members they serve. CHWs have been identified as a valuable resource that can deliver services around the healthcare journey in a culturally sensitive way, thus leading to positive health outcomes. While the market for care navigation and care coordination is crowded, there is tremendous potential to leverage CHWs as a resource on a larger scale to drive improved health outcomes for underserved communities. The US Department of Health and Human Services’ recently announced of the availability of $226.5M in American Rescue Plan Funding to launch a Community Health Worker Training Program, and there have been (and are expected to be more) shifts in Medicaid funding for the development of community health centers and reimbursement for services provided by CHWs that were not previously reimbursed, therefore creating new opportunities for innovative CHW models.
Solution
Pear Suite aims to be a trusted care navigator to guide otherwise underserved populations through their health journey. Pear Suite empowers CHWs to support older adults and individuals in underserved communities by providing culturally sensitive, empathetic care navigation. CHWs are lay members of the community who typically work in association with the local health care system in both urban and rural environments. CHWs typically share ethnicity, language, socioeconomic status and life experiences with the communities they serve (NIH). Pear Suite leverages CHWs to connect people to resources (vaccination resources, food access, transportation, housing support, economic support) and also helps them to get onboarded to digital health programs or telehealth to support their health journey.
Pear Suite’s platform allows the CHW user to build custom care journeys to automate patient support and facilitate person-centered interactions; achieve higher activation rates through personalized recommendations and goal tracking; engage patients using omni-channel communication tools; and track real-time metrics to evaluate impact and drive actionable solutions. Pear Suite has both SaaS and tech-enabled services lines of business: the SaaS product is used by Pear Suite’s clients for their CHWs and the services product provides outsourced CHWs employed by Pear Suite to supplement the clients’ teams.
Why We Invested
Pear Suite transforms social determinants of health data into actionable solutions and empowers community health workers to provide culturally sensitive care navigation. Without actionable data, healthcare organizations struggle to address the social drivers of health at scale. Researchers estimate that a lack of data and inaction prevents 20M adults from living at home and costs billions annually. Pear Suite's cloud-based platform enables anyone to leverage data to better assess and address the social drivers of health in a scalable, cost-effective, and person-centered way. Pear Suite’s Cofounder and CEO, Colby Takeda, is mission driven and has a strong impact orientation to maximize the CHW as a valuable community resource to drive improved health outcomes by addressing often overlooked sociocultural factors that have a strong impact on health.
Pear Suite has traction with several different customer types. While sales to date have focused on government agencies, Pear Suite is expanding to focus its sales on healthcare organizations and startups as well as payor clients. Pear Suite has developed both a strong SaaS platform as well as a services business to address the multiple facets related to operating in the CHW market. We believe that Pear Suite is differentiated via its focus on CHWs as a key stakeholder in the patient journey with ability to drive impact both in terms of improved outcomes for patients and improved socioeconomic opportunities for the CHWs themselves.
Impact
Pear Suite was founded to address the lack of focus on social factors within healthcare. More specifically, there are many solutions in the healthcare space that aggregate healthcare data, but few are focused on translating social determinants of health (SDoH) data into actions to help individuals address their needs. Existing solutions do not lead to an action on behalf of the member, as solutions typically focus on what the data means to payors or providers. Therefore, Pear Suite seeks to leverage data to assess what actions can support long term outcomes for patients.
Community health workers are uniquely positioned to drive impact as frontline public health workers who typically share ethnicity, language, socioeconomic status, and life experiences with the community members they serve. As a result, they understand the sociocultural needs of that community and can effectively drive better health outcomes. The platform provides resources such as better understanding local food resources, support in accessing SNAP benefits, understanding affordable senior housing options, enrolling in virtual physical activity classes, connecting users to technology classes so that they can better leverage tech to manage their health and so on.
In addition to the impact in terms of improving health outcomes for the patients that Pear Suite will reach, the company can also create better economic outcomes for CHWs. The CHW role provides a potential path for upward mobility for individuals within a community. CHWs often move on to work as clinicians, nurse practitioners or in government agencies. Therefore, this role provides a meaningful starting point from which to kickstart workers’ careers.
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Why We Invested in LearnLux
By Rahul Bhide
It’s clear that financial wellness is becoming a table-stakes benefit, and the current offerings are no longer enough. Only 22% of Americans feel that they are ‘financially well’. Fiduciary planning and other financial wellness solutions could play a big role in bridging that gap for the other 78% of Americans. It’s not a coincidence that only 16% of Americans use plans built with a financial professional, a similar share to those that consider themselves financially well. Financial planning has long been focused on high-net-worth individuals, and many of the current solutions for low- and middle-income individuals are heavily focused on budgeting tools.
Employers have also identified financial wellness as a key focus area for employee benefits to address the impact on productivity from financial stress, but also to differentiate themselves and retain talent in the wake of the Great Resignation. Surveys done by Bank of America and TIAA demonstrate these trends, with results showing that 95% of employers feel a sense of responsibility for the financial wellness of their employees, up from 81% in 2015. Furthermore, more than 8 in 10 employers agree that financial wellness programs result in greater productivity and more satisfied employees.
Solution
LearnLux is a workplace financial wellbeing provider that blends fiduciary digital planning with access to one-on-one guidance from Certified Financial Planner™ (CFP) professionals. LearnLux's program equips employees with a financial plan to guide them through key decision points across all life events. On the tech platform, employees can complete a quick financial checkup, set goals, and get an individualized financial plan. If employees need more support, they can book a free video call with a CFP. Employees usually start with a check-up to establish a baseline and identify blind spots and priorities. Subsequently, the platform gets into personalized elements such as health insurance and retirement planning.
Once a strong foundation is in place, the platform addresses more sophisticated elements such as savings for real estate, managing education loans and tax optimization. The platform also enables employers to speed up their onboarding process by helping new hires make benefit decisions, communicate the economic value of the benefits they are providing to differentiate themselves from other employers, and drive retention.
Why We Invested
We’ve been really impressed with the founders, the sister-brother duo of Rebecca Liebman (CEO) and Michael Liebman (COO). Both have focused on financial inclusion in different ways throughout their careers so far. LearnLux is serving people across income brackets, and the product was designed from the beginning for both blue collar employees and executives alike, giving LearnLux a differentiated positioning in the market and strengthening the impact potential. So far, customers of LearnLux have been similarly impressed, with all choosing to grow their relationship with LearnLux from year to year. Lastly, we see significant tailwinds as employers prioritize the financial wellness of their employees to reduce stress, improve productivity and retention, and differentiate themselves from other employers.
Impact
LearnLux enables the 78% of Americans that don’t have financial planning support to access unbiased financial planning and advice. We expect LearnLux to drive important results including reduction in financial stress for employees, greater use of pretax products, on-time retirement, and healthcare savings. LearnLux is inclusive across all ages, income levels, and job types; and the employee base it serves includes traditionally hard to reach populations like manufacturing, construction, retail and hourly workers.