Nairobi, Kenya: The Carbon Value Exchange (Cavex) has successfully closed its seed funding round, led by E3 Capital with participation from FSD Africa Investments (FSDAi), to bring its digital carbon financing platform to full commercial scalability. The E3 Capital and Cavex partnership will also provide an opportunity for E3 Capital’s existing and future portfolio companies to access the carbon markets through the platform.
E3 Capital’s commitment, through its second fund, the E3 Low Carbon Economy Fund (E3 LCEF I), will support Cavex in launching a highly innovative platform that utilises digital technologies to increase trust, equity, and transparency in the voluntary carbon markets. Cavex enables access to critical carbon financing for small-scale projects across Africa, which currently struggle to participate given the high up-front cost and time required for carbon credit validation, issuance, and brokerage.
Nick Hughes, CEO and Co-Founder, Cavex, said: “This investment will help us prove how digital technology can open-up climate finance for many people, communities and projects that are displacing or removing carbon. Cavex has the potential to scale in the way mobile money scaled 15 years ago when Kenya and M-PESA spearheaded a global wave of digital finance. More widely, Africa has a huge role to play in the evolution of carbon markets and in this context, it is critical that we find ways to distribute climate finance more equitably and in a way that has real socio-economic impact.”
Cavex’s digital platform is an end-to-end solution that connects buyers of carbon credits directly with high-quality projects from the Global South by leveraging innovative digital technologies to enable validation of the integrity of project data, introduce visibility and full traceability in project activities, and increase pricing transparency in what is to date a highly fragmented market. The platform aims to positively impact the voluntary markets through two key designs, i) use high-quality data to lower participation costs and increase integrity of carbon markets, and ii) reduce the reliance on intermediaries and ensure a greater flow of revenues from the sale of credits back to project owners and their customers.
Paras Patel, Managing Partner at E3 Capital, said: 'Expanding access to carbon financing for smaller projects is critical to driving inclusivity in the voluntary carbon markets. We are extremely pleased to support Cavex and the work that the team is doing to unlock verification, trading and access to finance for projects in Africa. By leveraging digital technology, Cavex’s platform brings integrity and price transparency to the sector, supporting a much-needed market mechanism to ensure the equitable distribution of climate finance.”
About Cavex
Cavex is a digital market and payments platform that connects buyers of carbon offsets to high-impact projects in the Global South. The platform enables access to carbon financing for a wide range of small-scale projects with a target to channel over $500m to projects by 2030. The innovative model drives efficiencies by utilising digital technologies and data capture to minimise the time and cost required for projects to validate and transact their carbon credits and ensures the majority of funds are channelled directly to projects and beneficiaries.
