Evaluating only Patch’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. Documented cause: Market collapse.
Key Events Timeline
FOUNDING
Patch founded in San Francisco to build carbon credit procurement API for enterprises.
FUNDING
Raised $10M Series A led by Coatue, onboarded 100+ enterprise customers including Shopify.
REGULATORY ACTION
Guardian investigation revealed 90% of Verra rainforest credits were worthless; Patch enterprise pipeline froze.
SHUTDOWN
Patch wound down marketplace operations after failing to pivot to higher-integrity credit sources.
Full Analysis
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Documented cause
Patch raised $55M across Series A and B to build a carbon credit API marketplace. By 2023, corporate demand for voluntary carbon credits collapsed following Guardian/Zeit investigations exposing Verra-certified REDD+ credits as largely phantom offsets. Patch lost over 60% of enterprise pipeline as buyers paused procurement. The company laid off 40% of staff in late 2023 and shut down marketplace operations by mid-2024.
Lesson
“Building a marketplace on voluntary carbon credits requires solving integrity issues before scaling distribution.”