South Pole reaches unicorn status, partners with Swisscom
Quantum Commodity Intelligence - Swiss carbon project developer and climate solutions business South Pole is now valued at more than $1 billion following successful fundraises this year, its CEO Renat Heuberger told Quantum, while announcing a new partnership on data.
On Tuesday, telecommunications company Swisscom revealed a minority investment in South Pole and an agreement to cooperate on digitisation and sustainability.
This follows a large investment from Singapore's Temasek and the US' Salesforce Ventures announced just two months ago, in early February.
Carbon offset prices have risen more than 400% in the past year, boosting the valuation of companies involved in the sector and triggering a rush of investments.
South Pole was founded in 2006 and has provided finance to nearly 1,000 emission reduction projects in more than 50 countries to date.
The company has previously said that its founders, who still work there, and staff retain a majority share in the business.
Upstream and downstream focus
South Pole's focus on creation was project development, but over the last decade, it has also built a sizeable climate solutions business advising around 3,000 companies on how to reduce their carbon footprint.
Today, each business represents around half the company's activities, says Heuberger.
"16 years ago, the value was entirely in the upstream, but from around 2012 market value started shifting to the downstream. These days there's no clear buyer or seller's market and things are more balanced."
Tuesday's announcement, focused on climate solutions, will help the company accelerate investments in digitisation and "allow clients to decide at a much bigger scale."
Earlier this year, South Pole acquired Carbonsink to boost its carbon project pipeline and presence in Italy and took a majority stake in Sweden's GoClimate, which will remain autonomous.
GoClimate offers a subscription service that allows users to offset their personal emissions and also counts companies among its subscribers.
"Our ambition is much higher than trading carbon...we want to make money flow into climate solutions," says Renat Heuberger, who is keen to highlight the urgency of the climate challenge.
Largest project developer
In 2021, South Pole signed agreements to develop over 60 new carbon projects around the globe, with plans for at least as many projects again in 2022.
It is now the world's largest project developer with a market share of around 20% and a major focus on Asia, one of the largest sources of carbon credit supply.
The company also trades in carbon offsets but says this is not its core business.
Trade is only used to offload surplus volumes to intermediaries or to buy specific credits on behalf of clients from its advisory business.
It has seen a strong rise in interest for long-term investments from the corporate sector, a phenomenon that has also been highlighted by other developers.
This, for example, can take the form of a 20-year supply arrangement to develop a forestry project, where both South Pole and the client agree to invest.
"Supply has been low because demand was low. It's being fixed as we speak because we have a demand signal," says Heuberger.
