Chestnut Carbon Secures $160m to Transform Farmland into Forests

Deal News | Feb 13, 2025 | Cloverlay Investment Managemen

Chestnut Carbon Secures $160m to Transform Farmland into Forests

Chestnut Carbon, a nature-based carbon removal startup, has secured a $160 million Series B funding to further its mission of converting degraded farmland into forests. The investment was led by the Canada Pension Plan Investment Board, Cloverlay, and DBL Partners. Initially backed by Kimmeridge, a private equity firm known for energy investments, Chestnut Carbon has already purchased 35,000 acres in the southeastern U.S. The company aims to expand its carbon credit capacity to 100 million metric tons by 2030. These efforts align with the growing demand for carbon credits as companies seek environmental impact mitigation solutions. Despite its potential, Chestnut’s initiatives represent a minor portion of the global emissions challenge, emphasizing the need for widespread climate action.

Sectors

  • Sustainable Agriculture
  • Carbon Markets
  • Private Equity

Geography

  • United States – The startup has acquired significant acreage in the southeastern U.S., marking it as a primary geography for operations.
  • Canada – Involvement of the Canada Pension Plan Investment Board as an investor shows relevance to Canadian financial interests.

Industry

  • Sustainable Agriculture – The article focuses on transforming degraded farmland into forests, characterizing sustainable agricultural practices.
  • Carbon Markets – The generation and sale of carbon credits are central to Chestnut Carbon’s business model.
  • Private Equity – The involvement of private equity firms such as Cloverlay indicates significant financial interest in sustainable sectors.

Financials

  • $160 million – The amount raised by Chestnut Carbon in Series B funding.
  • 35,000 acres – Land acquired by Chestnut Carbon in the southeastern U.S.
  • 7 million carbon credits – Credits sold to Microsoft under a long-term agreement.
  • 100 million metric tons – Target carbon credit capacity by 2030.

Participants

NameRoleTypeDescription
Chestnut CarbonTargetCompanyA startup focusing on nature-based carbon removal by converting farmland into forests.
Cloverlay Investment ManagementInvestorCompanyA private equity firm involved in funding Chestnut Carbon's expansion.
Canada Pension Plan Investment BoardInvestorCompanyParticipated in the Series B funding round for Chestnut Carbon.
DBL PartnersInvestorCompanyA venture capital firm investing in Chestnut Carbon's Series B round.
MicrosoftBuyerCompanyEntered a 25-year deal to purchase carbon credits from Chestnut Carbon.
KimmeridgeInitial InvestorCompanyA private equity firm that initially backed Chestnut Carbon with up to $200 million.