Industry Report: Sustainability Losing Its Significance
While environmental issues are becoming more relevant in today’s world, we have looked into sustainability startups’ funding trends over the years.
In the light of topics such as environmental degradation, climate change, overconsumption, population growth, and much more, sustainability becomes an important topic. But how relevant is sustainability in the startup world?
From what we know, not many startups have devoted themselves to sustainability. In our startup database, we have 3,258 startups related to sustainability. That is just 2% of all startups. But does the funding of those startups reflect the same conclusion?
Sustainability funding on a decline
Looking back, sustainability startups started gaining traction in 2012.
The funding of those startups increased until reaching its peak in 2014, where the funding topped at $4,4bn.
Since then, the funding has been on a decline, only experiencing a slight increase in 2016. Overall, 2017 was the worst year regarding the funding of sustainability startups, where funding was at $2bn.
So, it looks like sustainability funding is cooling down funding-wise and regarding the number of rounds as well. With a growing need for a sustainable environment, this trend is slightly worrying.
Countries with the highest sustainability focus
Not surprisingly, the US is the country with the highest amount of funding going to sustainability-focused startups. But only 4% of the country’s startup funding has gone to sustainability startups.
Kenya, on the other hand, had almost half of its startup funding supporting sustainability-focused startups.
Europe falling behind on sustainability
Out of the top ten countries with the highest amount of startup funding going to sustainability startups, only three countries were from Europe. This is quite surprising taking into account the fact that Europe is one of the greenest and eco-friendliest regions in the world.
It’s especially interesting to see that Western Europe is having less of the startup funding going into sustainability-focused startups than Eastern Europe. Poland is the leader of the region, with 23%, or $55m, of its total funding going to sustainability startups.
The full report is completely free and available for download here: markets.funderbeam.com/reports
