As Earth’s climate has warmed, more frequent and intense weather events such as floods, extreme droughts, wildfires have been witnessed. Amidst the world experiencing the hottest days in human history to date, the UN Secretary-General, António Guterres, declared that “the era of global warming has ended , the era of global boiling has arrived.” Despite the existing challenges, scientists and climate activists maintain their hope to achieve the goal outlined by the Paris Agreement of reaching net zero emissions by 2050. At this stage, simply recycling plastics or just planting trees is not sufficient to address the challenge. Lately, there’s been a lot of buzz about climate-tech companies fighting climate change, but most of us are still in the dark about what they really do.
Don’t worry, though! Web Capitals is here to break it down for you. We’ll explain how these companies are making a difference, their awesome potential, and the big investments being made in the climate tech world. You will be amazed to know about the incredible potential of climate tech innovations in shaping the future of planet.
Understanding Climate Tech
Climate tech encompasses a diverse range of technologies aimed at tackling environmental challenges and combating climate change. One crucial aspect is the reduction of greenhouse gas emissions and plastic pollution in the ecosystem. This domain includes innovative solutions like harnessing renewable resources such as solar and wind energy.
Another significant facet of climate tech involves synthetic biology. Organisms are engineered to contribute to emission reduction from landfills or the breakdown of plastics into more eco-friendly substances. This cutting-edge approach holds great promise in addressing environmental issues.
Additionally, there is considerable potential in fusion energy. It involves merging light atoms like hydrogen to create heavier elements, resulting in the release of vast amounts of energy. This energy can be harnessed and converted into usable electricity through fusion machines, providing a clean alternative to traditional resources.
However, these processes heavily rely on technology and require skilled individuals well-versed in technology. These solutions demand highly skilled individuals with expertise in computer science, engineering, chemistry and biological sciences. While entrepreneurial talents with goals and necessary expertise are scattered throughout the world, they face enormous challenges to secure adequate funding for their ventures. Unfortunately, climate tech space is not garnering the attention and investments it truly deserves from the governments and investors around the world.
WHY CLIMATE TECH DEMANDS INVESTMENT FOCUS
Given the current chaotic climate events, it is evident that the upcoming days will inevitably be hotter. However, to prevent ecological collapse, urgent action is crucial. The solution lies in rapidly increasing the utilisation of clean-tech/green-tech, to replace our reliance on fossil fuels. By getting sufficient support and investments from governments and investment firms, green technologies have the potential to transition from labs to practical applications or be rapidly commercialised playing a pivotal role in combating and even reversing climate change.To prevent potential setbacks, it is crucial for governments to encourage nationwide support for climate tech innovations. Governments can achieve this by offering incentives to investors and entrepreneurs, fostering an environment to promote innovation and investment in the climate tech sector.
Entrepreneurship or venture capital are exciting career options filled with opportunities to make a positive impact. It’s crucial to consider the bigger picture beyond the popular startup categories like SaaS, e-commerce, etc before making investments. Climate tech is where the next groundbreaking innovations are likely to happen, and it’s essential for investors to recognize this. While these startups might carry higher risks and take longer to see returns compared to SaaS, the potential rewards extend far beyond financial gains. Climate tech has the power to create significant societal and environmental benefits that are crucial for the world’s future.
Climate Tech Investment Journey: Past and Future
In a View from the Top Talk organised by Stanford GSB, reputed investor Chamath Palihapitiya, the founder of Social Capital, shared his insight on the future of investments. He predicted that in the next 50 years, the most substantial value creation will occur in sectors like drug development, climate tech, and other hard tech areas. These areas offer immense opportunities due to their low competitive pressures, making them fertile grounds for transformative growth.
So, as for those who are or aspire to be entrepreneurs or investors, keep an eye on the emerging and impactful world of climate tech. It’s not just about financial gains but also about being a part of the positive change the world desperately needs. Embrace innovation and be a catalyst for a better and sustainable future through innovations and investments.
A decade ago, the climate tech sector witnessed more failures and bankruptcies than success stories due to the lack of supportive public policies. However, times have changed, and the revised policies now favor such ventures. While some investors may have past negative experiences, they shouldn’t let those battle scars deter them from investing in the climate tech sector again, as the current era offers better opportunities and a more favorable environment for success.
EXPLORING THE DIVERSE WORLD OF CLIMATE TECH ENTREPRENEURSHIP
The landscape of climate tech startups is diverse, comprising different types and niches. Let’s take a closer at some amazing startups that are determined to stop climate change:
Ubiquitous Energy: This is a series B stage startup that was founded by scientists from MIT. This startup is now producing its highly transparent, efficient solar cells in a production facility in Silicon Valley. Ubiquitous Energy’s patented technology, UE Power™, is the world’s first invisible electricity-generating alternative to traditional windows. UE Power™ harvests solar energy and serves as an invisible, onboard source of electricity for greater energy efficiency.
Propagate: It is a software, development and financing ecosystem that makes it easy for farms to transition acreage to agroforestry. The platform provides access to agronomic insights, technical assistance, and financing so that farms can reduce risk while integrating fruit, nut and timber trees with animal or crop farming systems. We are a Techstars-backed company, a portfolio company of Elemental Excelerator, and an awardee of USDA’s Partnerships for Climate Smart Commodities.
Toco: it is a company driven by a passion to combat climate change by revolutionizing aspects of the global financial system. Their mission is to create a new era of environmental consciousness through the introduction of Tocos; a groundbreaking carbon currency. Tocos represents one tonne of carbon dioxide that has been removed from the atmosphere, giving individuals and businesses a tangible way to offset their carbon footprint and contribute to a sustainable future. Through a user-friendly digital platform, individuals can easily convert their earnings into Tocos. This not only accelerates carbon reduction efforts but also creates a marketplace where carbon assets can be exchanged or invested.
Twelve: it is a chemical technology startup based in Berkeley, California. They develop technology to convert CO2 into profitable chemicals, such as plastics and transportation fuels. Currently, the company uses metal catalysts to produce synthetic gas (syngas), methane, and ethylene.
Kiverdi: California-based startup aims to provide solutions that revive the soil, convert plastics into biodegradable material. Kiverdi also breaks down carbon material into its respective fundamental elements to create bio-based products.
CURRENT INVESTMENTS IN CLIMATE-TECH SPACE
Investors have the liberty to choose their preferred category within the climate tech space, aligning with their expertise to bring an impact. For instance, those intrigued by the intersection of biology and sustainability may consider supporting synthetic biology startups developing climate solutions. They can even invest in startups that generate electricity from waste food . Similarly, investors interested in the aviation industry can make a contribution by backing startups focused on generating green aviation fuel. These are mere illustrations; investors can explore their own interests and find opportunities to make a positive impact in the areas they are passionate about.
There are few venture capital firms that highly focus on investing in climate tech startups. One such venture capital firm is Fifty Years. The mission of Fifty Years is to solve the world’s biggest problem through technology and entrepreneurship. One of the areas that they are passionate about is, well, you guessed it right – climate tech. In the past, they have invested in successful startups like Solugen. Solugen, with a current valuation of approximately $2 billion, runs a plant in Houston, Texas. At this facility, the chemical company transforms custom enzymes and renewable feedstock that were previously derived from carbon-intensive resources. By doing so, Solugen addresses the issues of water, air, and soil pollution associated with traditional chemical production methods.
Lately, Fifty Years has collaborated with EQT Foundation and Automattic to launch a fast grants program that awards $25K – $100K to scientists. This is to accelerate their solution that leverages biotech to mitigate climate change. Established players like Obvious Ventures and Lux Capital are already involved in the climate tech space. Additionally, new entrants are joining to contribute to the growing momentum in climate tech investments.
EMBRACING CLIMATE TECH INNOVATIONS
The urgency to address climate change has reached a critical point as we witness the increasing impacts of it through extreme weather events. Climate tech startups hold a vital role in combating these challenges and driving positive environmental change. However, many innovative solutions remain stuck in the lab due to funding hurdles. While substantial investments are needed in this space, confusion, doubts, and fear among investors have hindered the flow of funds. Yet, for a greener future, it is imperative for investors to recognise the value and potential of climate technology. By providing essential support and investments, we can accelerate the transition to a more sustainable and resilient planet. The time for action is now, and together, we can forge a path toward a more sustainable future for generations.