Climate tech startups are making a return but will this time be any different? Many of you might not know but climate tech startups aren’t altogether a new phenomenon. The same thing with a different name made waves back in 2006-2011, it was known as “cleantech” then. It successfully collected heaps of money in investments but the majority of the startups ended up failing and didn’t even return the money.
During that time, venture capitalists plowed over $25 billion into cleantech startups and lost half the money. This calls for serious introspection into this times’ boom and how will it be different from the last time?
Climate Tech is primarily focused on employing technology to mitigate climate change effects. For example, projects like clean energy and other climate-related technologies are the highlight.
Andrew Beebe, managing director of Obvious Ventures, which invests in clean-energy and transportation startups, said in an email: “Climate has many, many problems, with many different solutions and that will create many opportunities to build big, valuable companies”. “From batteries to mobility to energy efficiency to carbon capture and beyond.”
It is paramount to the survival of mankind that climate change gets the attention it demands. It calls for sustained investment in technologies that can mitigate the worst effects of climate change. This existential challenge has allowed tech startups to win huge investments to run climate-based projects. Not only does the world need this investment at this point but it will yield returns too. People are intrigued to invest in a domain that is promising considering the alarming climate change situation.
Climate tech startups have raised more money in 2021 than any year before which is a testament to the point made above. It’s six times more than what was raised in 2016 just after the Paris agreement. This year so far, climate tech startups have raised $32 billion, according to a new report from Dealroom and London and Partners.
The second boom will have to reinforce the alarming climate change situation and how tech startups are the solution. For this to succeed, the criticism shouldn’t be misplaced as leaving the role of governments and global leaders will amount to an incomplete tackling of the issue at hand.
The role of global leaders is pertinent to these ventures as climate change is a global issue and needs to be addressed at a global level. The kind of support and seriousness that global governments leaders can offer is unmatched. The rationale behind making such a bold statement that this wave will be different from the last one is that climate change is at an all-time alarming point now.
Governments are made to do better to contain the worst possible effects of climate change and there the startups have an amazing opportunity. It’s less of a corporate thing and more of a “save everyone and yourself” thing.
Although this is very promising for the future and it should be taken seriously, the purpose and seriousness of it get deluded when states pull out from agreements like the Paris agreement. The United States was the first one to pull out of the Paris agreement in 2017 which lead to repercussions. Moves like these not only impact the whole narrative but startups that are working to make it happen.