Lisett Luik is co-founder and COO of Arbonics, a Plural-backed startup that is leveraging the potential of forests to fight for a better planet. We caught up with Lisett, a graduate of Yale and LSE as well as former team member of Taavet+Sten, to learn more about Arbonics. We talked about her experience raising money with Plural, the carbon market, carbon credits, transparency, and the extent of the possible contribution by forests.
Tell us about yourself. How did you end up in the startup world?
I got started in startups while still in university – I joined a then-small payments startup called TransferWise as an intern. This was the first time I experienced a small, high-growth company, and I loved it from day one. I always knew I wanted to build something from scratch myself, but it took 10 years to finally reach the point where I felt I was ready.
And what were you doing previous to Arbonics?
I worked in technology investments at Taavet+Sten, an investment firm founded by Estonian entrepreneurs Taavet Hinrikus and Sten Tamkivi. Prior to that, I lived in the US and UK, and worked for a couple of start-ups and for my one foray into the corporate world, at American Express.
The Estonian startup ecosystem is seen as one of the most exciting in Europe. Why do you think so many Estonians want to start up?
We’re a tiny country with a challenging history – this seems to have made Estonians quite scrappy and hard-working, which are good personality traits if you want to be an entrepreneur.
Additionally, we’ve benefited from a few early successes such as Skype and Pipedrive, which helped kick-start the ecosystem here. The result has been a positive flywheel: Skype alumni built and funded the next wave of successful startups, including Wise (previously TransferWise), Bolt and others; which in turn are now helping to incubate the third wave of successful Estonian startups.
What was your fundraising experience like?
At Arbonics, we benefited from a close relationship with one of our to-be investors from before Day 1 – Taavet Hinrikus was part of the original formation of the idea, and backed us as a founding investor, alongside Plural.
The whole process was hence pretty smooth and fast, from receiving the initial term sheet to round closed in about a month.
Explain to us what Arbonics does, in a nutshell.
We help landowners realise the climate impact of their land, by planting new forests and changing existing forest management practices. We do this with the help of a data platform that assesses each plot of land and estimates its carbon storage potential.
Rewarding landowners for carbon storage is enabled by carbon credits, which Arbonics helps sell to tech companies looking to compensate for their unavoidable emissions.
What is Arbonics’ business model?
We help landowners generate carbon credits and in return take a % of credits generated.
What impact can forests make, if managed properly?
Nature-based solutions (including forestry) can help address up to 37% of climate change mitigation up to 2030; and more importantly, do it at a reasonable cost (€30-90/tCO2e vs >€500/tCO2e for DAC and other technological solutions).
In Europe alone, there’s 160 million hectares of forestland to tackle. Through a variety of products, this could sequester as much as 2 gigatonnes of additional carbon per year.
What is your target audience / market?
We are starting out in Northern and Eastern Europe, which have a lot of forest knowledge and forest owners already – but in the medium term, we hope to make our services available to all landowners across Europe.
Why are carbon credits such a controversial topic?
Carbon credits range from highly questionable (e.g. “avoided emissions” through some non-monitored projects that theoretically change behaviour, but cannot be proven) to highly trackable and provable.
Historically, the market has been a bit of a Wild West – unregulated and lacking in oversight, meaning that a large portion of credits sold had questionable provenance. However, with modern technologies like remote sensing, it’s now possible to bring more transparency to the market, and that’s what we aim to do with Arbonics.
Why focus on credits at all? As much as we’d all like to, it’s simply not possible to reduce all emissions to zero overnight – even sustainable technologies like electric cars or solar panels create CO2 throughout the production process. Carbon credits are meant for companies who already have a plan in place to reduce their overall CO2 footprint, but who need help neutralising their unavoidable emissions.
What can we do to bring more trust and transparency to carbon markets?
A key principle is to use transparent and trackable data-based estimation and measurement. For example, we assess the suitability of a specific plot of land by looking at 20+ different data sources, all of which are either backed by government or research institutions.
What is lined up for Lisett and Arbonics in the next 12 months?
We’re focused on growing our product and reaching more landowners. In the process, we’ll probably need to double or triple the size of our team, so we’re always looking to talk to interesting people who are enthusiastic about the climatetech and naturetech space – please reach out if that speaks to you!
What’s the best way for people to stay updated with the latest from you?
You can follow Arbonics on Linkedin here or sign up for our newsletter on Substack. I am on Twitter, where I share both thoughts about the carbon markets and forestry, as well as the day-to-day experience of building an early-stage startup & occasional book recommendations.