Heirloom raises $150M for its limestone-based carbon removal tech

Direct air capture company Heirloom said it has raised $150 million in its latest fundraising round, almost triple the amount of the company’s prior funding series.

Heirloom, which was founded in 2020, last year opened what it said was the first commercial direct air capture facility in the U.S., a project it claims can capture as much as 1,000 tons of carbon dioxide per year. The California-based company is also involved in one of the Department of Energy-backed regional direct air capture hubs that are meant to each be able to capture one million tons of carbon dioxide a year once operational. It’s additionally working on another facility in Louisiana that it hopes will be able to capture roughly 17,000 tons of carbon dioxide a year and be up and running in 2026.

Heirloom’s latest funding round is one of the largest for a firm working on direct air capture technology, a form of carbon dioxide removal that’s garnered significant attention from private investors and the federal government. The funding round also comes during a slower year for venture funding for carbon and emissions technology broadly, PitchBook data shows.

The United Nations’ Intergovernmental Panel on Climate Change has said carbon removal is going to be a key part in limiting global warming to 2 degrees Celsius or less. A range of startups focused on various types of carbon removal, including direct air capture, have sprouted up to tackle the challenge, but the industry is a ways off from scaling.

Heirloom said it plans to use the latest funding to try to lower the cost of direct air capture and work on more projects.

“We believe DAC is all about cost, cost, and cost – and that it will only scale to make a meaningful difference on climate change if it is affordable,” Heirloom Chief Executive and Cofounder Shashank Samala said in a statement.

While direct air capture companies have logged a number of high-profile deals with major companies and the sector has benefited from policy and financial support from the government, the industry as a whole has a long way to go to bring down costs.

A spokesperson for Heirloom said the company’s price on is generally between $600 and $1,000 per ton of carbon removed. Heirloom expects the industry to get to a general price of between $200 and $300 per ton by the early part of the next decade, adding that the startup ​“has line of sight to profitability at those prices.” The company ​“is on a trajectory” to hit $100 per ton, the spokesperson said, which is generally viewed by industry and others as the ideal price point for direct air capture.

How much companies pay per ton of removed carbon dioxide isn’t usually disclosed when purchase agreements are announced, but according to cdr.fyi, direct air capture cost an average of $715 per ton in 2023, down from $1,261 per ton in 2022. Direct air capture costs much more than most of the other carbon removal methods the data provider evaluated.

Heirloom’s direct air capture process involves hastening the pace at which limestone captures carbon dioxide, shortening it from years to a few days. The company’s partners then inject the captured greenhouse gas into concrete or store it underground.

Heirloom has reached deals with Microsoft and Frontier to purchase removed carbon dioxide. A company spokesperson said the participants in its new funding round don’t get any offtake agreements as a result of their investments.

Future Positive and Lowercarbon Capital both led the Series B fundraising round for Heirloom. Bill Gates’ Breakthrough Energy Ventures, Mitsubishi Corporation in the Americas, and Siemens Financial Services were some of the other investors.

Heirloom’s latest fundraise follows a $53 million Series A announced in March 2022. Lowercarbon Capital and Breakthrough Energy Ventures were also investors in that round.