Why we invested in Funga
In the face of escalating climate change and the degradation of global forest ecosystems, Funga emerges as a beacon of hope, offering a groundbreaking solution to two of the planet’s most pressing environmental challenges. By focusing on enhancing carbon sequestration and rewilding soil fungal networks, Funga aims to reverse the adverse effects of climate change and foster healthier ecosystems across privately and potentially publicly managed forests worldwide. This innovative approach not only targets the heart of climate change mitigation but also promises localized ecosystem benefits, supporting a diverse range of species that thrive in enriched soils.
Funga’s mission extends beyond the forest carbon market, eyeing the vast potential to improve soil quality across existing forests, agriculture, and grasslands. As the company progresses, its contributions to scientific knowledge, particularly in studying soil microbiomes, are likely to expand, offering new insights into environmental preservation and sustainability.
One of Funga’s most compelling projections is its ability to significantly accelerate tree growth, by up to 64%, which could lead to the sequestration of 120 million tons of CO2 annually by 2030 in the United States alone. By 2050, Funga aspires to sequester a cumulative total of 3 billion tons of CO2, a figure that notably excludes additional carbon storage through soils. The potential for carbon capture extends to reforested areas in Brazil, which could theoretically absorb up to 746 million metric tons of carbon dioxide equivalent per year, surpassing other nations in its capacity to mitigate climate change impacts.
The method Funga employs — transplanting the microbiomes from healthy, intact forests into those with degraded soils — is a testament to the company’s commitment to biodiversity and ecosystem health. Recognizing that over half of terrestrial life is found within soil networks, Funga’s efforts in maintaining and restoring these networks are crucial for preventing or reversing topsoil loss, a risk that threatens both biodiversity and global food production.
The United States, with its 751 million acres of forest land, 68% of which are commercial forests, represents a significant opportunity for Funga’s interventions. The restoration potential is highlighted by the loss of 17.5 to 46.5 million hectares of tree cover from 2001 to 2022, underscoring the urgent need for solutions like Funga’s.
In addition to its environmental ambitions, Funga is set to make substantial contributions to the scientific community. With an efficient, privately funded model to study soil microbiomes, the company stands on the verge of aiding species discovery, understanding environmental microbiomes, and identifying novel genomic signatures. This dual focus on environmental restoration and scientific advancement positions Funga as a pioneering force in the fight against climate change and the quest for a sustainable future.
We are convinced that Funga meets the 3 central elements of our thesis:
Founder Market Fit: led by Dr. Colin Averill, a leading fungal mycorrhizal network expert with many publications, who previously co-founded the fungal advocacy nonprofit SPUN while at ETH Zurich in Thomas Crowther’s lab. Averill gave a TED talk on the subject in 2023.
Market and Scalability: Funga serves a large and growing voluntary carbon market (projected to be $10–40B by 2030) and the commercial forest market, $430B in the US alone. Funga’s approach stacks neatly on top of existing forestry and NBS efforts, both improving ecosystem health and creating clear value for customers. This “win-win” sets the stage for rapid scalability through multiple industries.
Decisiveness: the company makes a significant dent in carbon sequestration, and by doing so it enriches degraded soils in forests, which will likely have additional biodiversity co-benefits beyond soil and tree health.
