A report from Forbes Magazine uncovered today the latest developments concerning the former co-founder and Chief Executive Officer of WeWork, Adam Neumann, who pivoted to the crypto scene lately after failing to take his co-working company public.

According to sources familiar with the current situation of Flowcarbon, a climate tech startup he founded in 2021, Neumann is offering investors a refund after it failed to launch its Goddess Nature Token (GNT). This a digital asset that would have been supposedly backed by carbon credits with a 1:1 ratio.

Also read: How to Invest in Green Energy in 2024 – Beginner’s Guide

Although Neumann secured over $70 million in funding during the Series A round of Flowcarbon, the token’s release was delayed multiple times in 2022. As months passed, investors started to get vocal about their frustration – a situation that probably forced Neumann to consider a refund.

The controversial entrepreneur was primarily backed by the well-known venture capital firm Andreessen Horowitz and its crypto division a16z. The project’s goal was to make it easier for companies to exchange carbon credits – a certificate that allows companies to offset their carbon emissions.

Carbon Credit Registries Opposed Tokenization in 2022

flowcarbon issues refund to investors after failing to launch gnt token

Sources who spoke to Forbes in anonymity commented that Flowcarbon faced resistance from carbon registries to tokenize these credits. Moreover, challenging market conditions may have played against the company’s business model as market sentiment back in 2022 when it tried to float the token was quite negative toward new offerings.

The value of carbon credits also experienced a significant decline during that year as their efficacy was questioned as a policy tool to reduce carbon emissions by governments. A prominent registry named Verra announced that they were banning the tokenization of carbon credits to protect the system from potential fraud.

In response to the industry’s interest in this type of product, Verra said that it was exploring other alternatives that involved the possibility of “immobilizing” carbon credits so they could be tokenized in a way that is transparent and traceable for market participants.

The broader voluntary carbon market has faced increasing scrutiny in recent years. Investigations found that some projects supplying credits had exaggerated their benefits, failed to actually remove carbon dioxide from the atmosphere, or been linked to alleged human rights violations. As a result, the value of carbon credits fell dramatically in 2022. Additionally, the tokenization of carbon credits raised concerns about the potential double counting of emissions reductions, with millions of retired carbon credits tokenized by various projects in 2021.

Flowcarbon Stays Active on Social Media Despite Reports

Flowcarbon has been actively reaching out to its investors to initiate the refund process according to sources cited by Forbes. The company hosted various Zoom calls to explain the reasons for this decision and provide guidance on the next steps.

GNT buyers were reportedly asked to sign documents that prevent them from taking legal action against the company and non-disclosure agreements (NDAs) on the project’s specifics.

The company claims that it will honor all of its refund requests. However, it has not publicly commented on any of these intentions or what the future holds for the project. Representatives from Flowcarbon were reached out by multiple media outlets but have opted not to comment on the matter.

 

Interestingly, the firm has been active on social media in the past couple of days after spending nearly a month without posting anything. On X, Flowcarbon confirmed that it will be hosting its CarbonSmart conference. The co-founder and CEO of the company, Dana Gibber, is scheduled to give a speech during the summit.

The involvement of top-notch venture capitalists first boosted the credibility of Flowcarbon. Its list of backers included Samsung Next and General Catalyst who provided funding to the project alongside a16z.

Arianna Simpson, a general partner at Andreessen Horowitz, had enthusiastically endorsed the venture, stating: “Adam and Rebekah’s vision is a key part of the story and that is really what gave birth to the company.”

How Many Setbacks Can Neumann Withstand Until He Losses His Backers?

Adam Neumann has been promoting Flowcarbon since he was ousted from WeWork back in 2019. Aside from this climate tech startup, he was also involved in a real estate venture that aimed to transform residential properties and received hundreds of millions in funding from Andreessen Horowitz for that project.

Also read: 4 Best Carbon Credit Brokers for 2024

Moreover, he has been reportedly engaging in discussions to buy back WeWork for around $500 million.

However, his inability to launch the GNT token is a setback for his entrepreneurial interests as it forces Flowcarbon to rethink its approach and value proposition. The company presents itself as a leading “carbon finance” venture.

It remains to be seen if Flowcarbon will provide additional details in the coming days about the future of the Goddess Nature Token. The industry will undoubtedly be watching closely to see what lessons can be learned and how future projects might succeed where this one faltered.

The carbon credit market has a critical role in societal efforts to combat climate change. However, its success demands solutions that are not just technologically advanced but also transparent, reliable, and capable of withstanding adverse market conditions.