Insurtech Kita, which is part of Lloyd's Lab cohort 8, has raised £350,000 ($617,775) in a pre-seed funding round led by Insurtech Gateway.

Co-founder and CEO Natalia Dorfman says a lack of insurance is holding back the development of carbon removal solutions at the rate the world needs. London-based Kita plans to insure the delivery of carbon units sold on the voluntary carbon market.

"Insurance is a crucial enabler,” she said. “By removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon-removal projects scale.”

Pre-sold carbon units carry “a risk of being under-delivered,” and this uncertainty has led to inefficient flows of capital to quality carbon removal projects.

Ms Dorfman says Increased buyer trust in delivery will lead to greater flows of capital to help carbon removal projects grow. By introducing insurance to reduce those risks carbon removal projects will command a higher price and attract inward investment.

The voluntary carbon market needs to grow more than 15-fold by 2030 to support delivery of net zero targets and its products will address a protection gap for both buyers and sellers.

“Kita has found a very interesting role for insurance to play in accelerating the growth of carbon removal markets,” Insurtech Gateway Co-founder Stephen Brittain said.

Kita will present at the Lloyd’s Lab Cohort 8 Demo Day in London on Wednesday.