$650 million investment is the biggest so far in direct air capture

Climeworks unveiled its Orca facility in Iceland in September 2021.

Swiss direct air capture (DAC) start-up firm Climeworks announced on 5 April that it has signed an equity round of $650 million (CHF 600 million), an apparent milestone in the financing of the carbon removal industry.

The funding is intended to unlock the next phase of Climeworks’ growth, “scaling direct air capture up to multi-million-ton capacity and implementing large-scale facilities as carbon removal becomes a trillion-dollar market.”

Formed in 2009, Climeworks is a prominent pioneer of DAC technology and describes itself as the most advanced industry player, with the world’s largest direct air capture and storage plant launched in September 2021. The new investor base includes some of the largest institutional technology and infrastructure investors globally.

The financing is co-led by Partners Group (acting on behalf of its clients) and GIC, with further participation from (in alphabetical order) Baillie Gifford, Carbon Removal Partners, Global Founders Capital, John Doerr, M&G, Swiss Re, as well as other new and existing shareholders including long-term investor and anchor shareholder BigPoint Holding AG. J.P. Morgan Securities LLC served as sole placement agent for Climeworks in connection with the transaction.

Christoph Gebald, co-founder and co-CEO of Climeworks hailed “a great milestone for our company as well as the entire industry.”

Jan Wurzbacher, co-founder and co-CEO of Climeworks: “We founded Climeworks with the vision to provide the world a tech that has the potential to reverse climate change. Accelerating the scale up of carbon removal capacity will play a crucial role in global efforts to keep global warming under 1.5°C, positively impacting the lives of billions of people. And this is what we will do starting now.”

Alex Seddon, Head of Catalyst Team, M&G said he believed the firm to be “the leading independent operator in the direct air capture sector”.

“Emissions removal is an essential complement to emissions reduction, and this technology has the potential to provide the requisite scale to meaningfully contribute to achieving the Paris Agreement goals.”

Alfred Gantner, Co-Founder and Executive Member of the Board of Directors, Partners Group, said: “Climeworks’ DAC plants are part of a portfolio of carbon removal technologies that are essential to achieving the Paris Agreement goals. The scalability of Climeworks’ technology makes it ideally suited to our transformational investing strategy and positions the Company to make a significant contribution to global carbon removal efforts. We are also attracted to Climeworks due to its close fit with our commitment to achieving lasting, positive stakeholder impact.”

Lee Qian, Investment Manager, Baillie Gifford, said: “Whilst there is no silver bullet for addressing climate change, Climeworks’ direct air capture technology has the potential to play an important role in helping the world avoid its worst impacts. There will be many hurdles to overcome, but the scale of the opportunity is huge. We have been very impressed by Climeworks’ management team and are excited to support them on the journey ahead.”

Maximilian Zeller, Founding & Managing Partner, Carbon Removal Partners, said Climeworks “has catalyzed the world’s imagination of gigaton-scale carbon removal. Further, it has been tirelessly educating and inspiring the world about this pivotal industry. We are proud to support Climeworks in its journey to fight for change.”