When Mark Chen’s 12-year-old son asked for carbon credits instead of Christmas gifts back in 2020, it sparked more than a family conversation — it planted the seed for a new startup. What started as a curious search quickly revealed a chaotic, fragmented system that even seasoned professionals struggle to navigate.
Chen, who had prior experience in the solar industry and a technical background, assumed he’d find his way through the carbon credit market with ease. But as he dove deeper, the complexity of determining project quality, comparing rating agencies, and finding truly impactful credits proved overwhelming.
That’s when he realized the issue was bigger than just personal confusion — it was a market failure.
If someone with experience in clean energy couldn’t confidently navigate the carbon credit landscape, how could the average small or midsize business stand a chance?
Larger corporations like Microsoft or Stripe have full sustainability teams and the resources to invest in carbon credit portfolios. But millions of smaller businesses — more than a million in the U.S. with over 20 employees — are left out of the conversation. According to Chen, only around 7,000 to 8,000 businesses are currently listed as carbon credit buyers. That gap represents a massive untapped opportunity.
To solve this, Chen launched Cnaught, a startup on a mission to simplify carbon credit purchases for companies without dedicated sustainability teams. The goal is straightforward: make carbon offsetting as easy as clicking a button.
Cnaught takes a hands-on approach, vetting projects, integrating third-party ratings, and adding its own layers of analysis to identify high-quality carbon credits. Once approved, the startup buys these credits in bulk, holds them in inventory, and resells them to businesses at a flat rate — generating revenue from the margin.
What makes Cnaught different is its commitment to accessibility. It doesn’t reinvent the carbon credit standard but enhances it through clarity, transparency, and ease. Think of it like an ETF for carbon offsets — customers can either customize their credit sources or choose from a curated default mix.
This model attracted early-stage investors. Bow Capital led a $4.5 million seed round, with participation from FJ Labs, Karman Ventures, and Silence VC. For Bow’s general partner Rafi Syed, the startup stood out for its focus on a vastly underserved market segment.
According to Syed, most carbon credit software startups target the top tier of the market — Microsoft, Stripe, and similar names with ESG teams in place. But Cnaught’s strategy is different: it’s tackling the “fat tail,” or the massive number of smaller businesses that still want to contribute to climate action but don’t know where to start.
With clients ranging from boutique brands like Seattle Chocolate Company to larger firms like Palantir, Cnaught is proving that carbon credit purchasing doesn’t need to be complex.
“We’re trying to be that easy button,” Chen said. “All they need to do is tell us how much carbon they want to offset — we’ll handle the rest.”
