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Ropes & Gray Advises Stripe in Formation of $925 Million Frontier Fund for Carbon Removal

Practices: Asset Management, Intellectual Property Transactions, Intellectual Property, Capital Markets, Capital Solutions & Private Credit, Technology, Media & Telecommunications, Mergers & Acquisitions, Private Equity, FinTech, ESG, CSR and Business and Human Rights

Ropes & Gray represented online payments technology provider Stripe Inc. in the formation of Frontier, a public-benefit corporation owned by Stripe, with an advance market commitment to purchase $925 million worth of permanent carbon removal from suppliers building promising new solutions between now and 2030.

Frontier is a wholly owned subsidiary of Stripe. It is funded by Stripe, Google parent Alphabet Inc., Shopify Inc., Facebook parent Meta Platforms Inc. and consulting industry leader McKinsey & Co. Inc. and tens of thousands of businesses using Stripe Climate, a program that allows online sellers using the company’s platform to devote a portion of sales to carbon removal.

Frontier’s aim is to aggregate demand from companies and governments that want to purchase carbon-capture solutions to achieve their net-zero pledges, vet the suppliers of those solutions and then facilitate purchases on behalf of buyers.

Companies will be eligible for selection if their technologies can store carbon for more than 1,000 years, offer a path to being affordable at scale, defined as less than $100 per ton by 2040, and a way to remove more than half a gigaton of carbon by 2040, among other factors.

Advance market commitment functions as a guarantee of demand to those working on investing in the technology. The model was originally used to develop vaccines for low-income countries, but has never been used for carbon removal at scale. Frontier’s goal is to send a demand signal to entrepreneurs, researchers and investors that there is a market for permanent carbon removal.

The Ropes & Gray team representing Stripe was led by mergers & acquisitions partner Chris Comeau and asset management partner Isabel Dische and included IP transactions counsel Emilia Cannella, mergers & acquisitions associate Sam Hurt, asset management associate Laura Appelt, and private equity associate Andrea Daley.

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