With the climate crisis requiring decarbonisation solutions, Kita has raised new funds to help launch its carbon insurance products. Insurer Kita has raised £350,000 in a series of pre-seed funding led by Insurtech Gateway, along with Carbon13, Climate VC and Echelon Capital. The company claims to be the world's first carbon insurer and will use this pre-seed tour to accelerate the product creation and hiring process to launch Kita's core carbon insurance products.
Kita's insurance products cover the risk of carbon delivery, eliminating a significant protection gap in the market for both buyers and sellers. According to the company, increased buyers' reliance on carbon distribution is leading to more capital flows to help decarbonization projects grow. By introducing insurance to mitigate these risks, Kita argues, decarbonisation projects will have a higher price and will attract inward investment. Kita's focus is on decarbonisation, which insures “carbon delivery risk” to enable decarbonisation solutions to scale.
“The world is in a climate crisis and decarbonisation is an important part of the solution. However, decarbonisation is new, it faces unique risks, and the lack of insurance to address these risks is holding back development at the rate the world needs. Kita believes that insurance is a crucial enabler – insurance will help direct capital to assist the scale of quality decarbonisation projects, by eliminating risk and increasing market confidence. We are passionate about bringing these custom carbon insurance products to market, and we are excited to work with Insurtech Gateway to do this quickly,” said Natalia Dorfman, Kita Co-Founder and CEO. the rest states that we need to eliminate billions of tons of CO₂ every year.
Kita notes that most decarbonization solutions generate revenue by selling carbon units in the voluntary carbon market, which should grow more than 15x by 2030 to support the achievement of net zero targets. Challenges in voluntary carbon markets include a lack of transparency and consistent risk management that leads to significant transaction risk – there is a risk of underdelivering previously sold carbon units. This uncertainty leads to an inefficient flow of capital into high-quality decarbonisation projects. Stephen Brittain, also Co-Founder of Insurtech Gateway; “Kita has found insurance a very interesting role to play in accelerating the growth of decarbonisation markets and we believe the Kita team are the best people for the job. We are excited to help them bring their products to market,” he added.