The Committee on Climate Change has a target of 30,000 trees to be planted annually as part of the UK’s legally binding Net Zero 2050 strategy, but last year only 13,000 were planted. Farmers manage 71 per cent of the UK’s land area and will clearly be involved in this planting but many are cash poor and struggle to justify the opportunity cost of tree planting. Farmers want to maintain the lifestyle of farming, but unless they can sustain themselves financially, they won’t be able to.
On the other side of the coin, companies are increasingly setting net zero carbon targets, and are finding there simply aren’t many UK-domestic carbon capture projects from which to buy offsets.
At Treeconomy, we provide a service and marketplace to landowners who plant trees and woodlands. We use drone-based LiDAR to quantify the carbon captured which differentiates us from the rest of our potential competitors. Current project developers use tape measures to provide a best estimate, which limits accuracy and scalability. We package this as carbon offsets and sell these high-quality offsets to corporates – providing a strong financial incentive and reward to our ‘carbon farmers’.
Our corporate offset purchasers get a higher quality carbon offset due to our technology advantage and are willing to pay a premium for these offsets, particularly as they are domestically sourced, but also because we can guarantee that the carbon we sell has actually been captured and stored. That means more money for our carbon farmers, and a virtuous circle.
Where did the idea originate?
Harry was working in wealth management but couldn’t find a credible investment that would provide both a financial return and a positive climate impact, which is what a lot of high-net-worth clients were interested in. Trees and forests could provide a great investment profile: plant trees, quantify carbon captured, sell the carbon yearly, receive income. It would provide a very credible income-investment, and one which should increase over time as the price of carbon appreciates. The current carbon price varies from single digits up to £24 in the UK, but Intergovernmental Panel on Climate Change (IPCC) estimates suggest that future carbon pricing could be north of $100 per tonne.
How did your team meet?
We met through a sustainability masterclass held at Imperial in June 2019. Treeconomy had just joined the Climate-KIC LaunchPad and I had been invited to the soft launch of the White City Campus as part of that. During the networking I met David Wheeler (co-founder at Academy for Sustainable innovation, and Principal at Sustainable Transitions), who liked the sound of Treeconomy and invited me to present the idea at his masterclass that week, called the Academy for Sustainable Innovation. I presented, Rob was in the masterclass and we went from there.
Do you have any advisers?
Our main adviser is Dr Irina Fedorenko, previous co-founder of BioCarbon Engineering, a drone company. She has a PhD from the University of Oxford and is currently working on a number of great projects including as Managing Director of Caux Dialogue on Environment and Security. We are fortunate to now have a number of other advisers through the Imperial Venture Mentoring Service, as well as through an AgriTech accelerator programme, Shake Climate Change, who have connected us with a few advisers with domain expertise relevant to agriculture and land management.
What stage is the business at and what are your plans moving forward?
We are still pre-seed. Our main project is currently designing a few test sites, where we will be planting up to 100 hectares of forestry and testing our drone-LiDAR system. The great thing with LiDAR is that it gives us a 3D map of the planted area. Current carbon calculation still uses tape measures and means you have to have a very rigid, grid-like planting regime. Using LiDAR means we can be more flexible with our planting types, so we will be testing both ecological innovation as well as the technology.
What’s been your biggest success so far?
Winning the Venture Catalyst Challenge People’s Prize was great for us! We’ve actually had a lot of interest stemming from it, with three potential angel investors reaching out specifically citing they saw us win and wanted to talk further. It’s given us a great platform! Our previous success came in November 2019 where we pitched in the Climate-KIC LaunchPad global final in Amsterdam with teams from all over the world.
What’s been the biggest challenge?
Matching the need to the business case has been the hardest part for us. We all know that action has to be taken to mitigate and adapt to climate change, and that it has to happen fast. But building the business and investment case has been challenging. Especially because we focus on trees and nature-based solutions and there is often a perception that it is a limited and flawed method. This couldn’t be further from the truth; trees and other nature-based solutions can provide more than a third of the cost-effective mitigation between now and 2030.
Building both the awareness of how effective nature-based solutions can be, as well as tailoring it to a specific customer need and want has been a very difficult balancing act. We are confident now that we have at least two core customer needs and are looking into a number of other avenues that could support growth.
What advice would you give to aspiring entrepreneurs?
Get uncomfortable. Accept that you don’t know everything at this stage and ask others for help. We have benefitted massively from other people’s support and our best meetings have come when we have been honest about what we do and don’t know. Secondly, I would say to research opportunities – there are loads of grants and accelerator programmes where you can learn a lot. We have done well just through putting ourselves out there and building some awareness through our personal networks and the networks of accelerators we participated in. Included with the knowledge and networks is grant funding, which is pretty key to get some traction, and is pretty much a pre-requisite now before considering equity funding – if you can prove customer demand, or build a very basic prototype with grant funding, it will speed up your development massively.
Support from Imperial
We approached the Enterprise Lab with an idea and some research, but the business coaching has really helped us to crystallise the business case. The coaching has provided the frameworks we needed to channel our enthusiasm constructively and efficiently, through practical sessions on business model design and timeline setting. We have also had support through Experts-in-Residence on the legal side, specifically with intellectual property and trademarks. Lastly, we have had a number of pitch practice sessions, some in person and some, more recently, remotely via Zoom. It’s been great to get feedback on different pitch ideas, especially as we have moved from in-person pitches to online, as the method of delivery for an effective presentation changes a lot.
The Venture Catalyst
Challenge was hugely important to Treeconomy’s development. It’s quite intense alongside your studies, but it means that you can really pick up some momentum and it forces you to tackle some very specific areas which are vital to success – including customer discovery which was a big push for us during the programme. The community aspect of it is great, as you are surrounded by some very creative and motivated individuals in semi-competitive, semi-collaborative environment.
I found it incredibly motivational, and I think even if you aren’t naturally competitive, just being in the environment and learning from others is incredibly valuable. The programme is very clearly structured, with weekly masterclasses on specific topics and subjects. It gave Treeconomy great structure to lean on for our development and informed our focus in our own meetings. The access to 1-2-1 pitch coaching and feedback from investors in the buildup to the final was also very valuable. It is very easy to lose sight of the core commercial direction of the business, and to focus on short-term details. Speaking to the investors was a good reminder of the core focuses to become an investable proposition. It’s also great to have been asked to list for the Imperial Innovation Fund. It feels like a great bridge and opportunity for us to showcase to investors the opportunity that Treeconomy represents, and to “hard launch” our business as we graduate and take the business on full time.