Climate Tech Vs. Cleantech: Where Is Investment Coming From?
At the turn of the decade, a resurgence of interest in cleantech began with a new movement called Climatetech / Climate Tech. To understand this movement, we have to double-click into the history of cleantech investment.
Cleantech investors got rocked 10–15 years ago while placing their bets into capital intensive industries to build solar panels, wind turbines, and biofuels. Almost every single investor lost money. The stinky aroma of that age finally began to air out as some solar companies and Tesla started getting market traction.
Now, as more scalable and potentially profitable innovations crop up, investors are returning to the fray to fund technologies to solve the climate crisis. These have become known as climate tech solutions.
For all intents and purposes, cleantech and climatetech are the same because they attempt to achieve environmental sustainability. For the nuanced differences between the two, here’s a comparison chart:
New Investment For Climate Solutions
Breakthrough Energy Ventures
This investment group founded by billionaires worldwide — Bill Gates, Richard Branson, Jack Ma, Jeff Bezos, Tom Steyer, Mark Zuckerberg, Ray Dalio, Michael Bloomberg, Reid Hoffman, etc. — helped catalyze the capital flows towards cleantech when they set up shop in 2015. The group deserves a big tip of the hat for establishing the $1B fund; they took action to lead the way when no one else was.
Amazon Climate Pledge Fund
In June 2020, Amazon got serious about its sustainability goals and developed a $2B investment program called The Climate Pledge Fund. The announcement was accompanied by news of establishing a “ Climate Pledge Arena “ for a new Seattle hockey team. Here’s an informative and inspiring video painting the vision for the NHL arena with “The Greenest Ice”:
Generate Capital $1B Fund
Since 2014, Generate Capital has been filling a financing gap for companies in the cleantech space that couldn’t get loans from traditional banks. Cleantech companies have often required substantial upfront capital without seeing profits for many years. That’s where Generate stepped in to help. And now the company raised a one-billion-dollar fund to scale up their impact.
Microsoft Climate Innovation Fund
Microsoft also announced a big $1B Climate Innovation Fund to invest in climate solutions but also went a step further with its announcement to become carbon negative by 2030. That means Microsoft will remove more carbon than it emits in 10 years. Then, seeking to become a trailblazer in sustainability, it took another giant step forward and stated that by 2050, it will remove ALL the carbon Microsoft has emitted since the company began in 1975.
Cleantech Venture Capital
Other notable cleantech venture capital firms have doubled down on the climate tech momentum and are investing in the new wave of sustainability. Some of them include:
And here’s a visualization of the new investment landscape in climate tech and cleantech:
ACT ON CLIMATE
There’s never been a better time to launch your own cleantech / climate tech startup! If you have an idea for a climate solution, a great way to get support is through the program at Third Derivative. Each startup selected for the accelerator receives a $100k in funding plus coaching and network benefits.
