The Future of Investing in Sustainable Startups and Cleantech

Sustainable startups and cleantech companies are expected to experience rapid growth in the next decade, with the global cleantech market projected to reach $1.5 trillion by 2025.

Investors are taking notice, with venture capital investments in sustainable startups increasing by 50% in the past year. This trend is driven by the growing demand for environmentally friendly products and services.

The key to successful investing in sustainable startups is to identify companies with scalable business models and strong market potential. A good example is a company that has developed a patented technology for converting CO2 into valuable chemicals.

By investing in sustainable startups, individuals can not only contribute to a cleaner environment but also potentially earn significant returns on their investments.

Sustainable Future Ventures is an independent VC that invests in climate tech and the built environment. They're backed by Patrizia, a €58B real asset investor.

They make their first investments from Late Seed to Series B, indicating they're looking for startups with a solid foundation. This stage is crucial for scaling and growth.

Recent investments include Piclo and Leap, showing their focus on supporting innovative sustainable startups.

Cleantech investment has exploded to $70 billion in 2022, with the United States leading the way, followed closely by China and Europe.

The global cleantech market is expected to reach $600 billion by 2030, with a growth rate of almost 6% between 2023 and 2027, making it an attractive investment opportunity.

Startups are playing a significant role in driving this growth, with companies like Glavel producing gravel from recycled glass and Arbiom developing protein alternatives for animal feedstock.

These innovations are making it possible to replace fossil-based materials with sustainable alternatives, reducing waste and pollution in industries like construction and food production.

Low-carbon construction is becoming a reality, with companies like INOVUES developing smart window technology that converts absorbed light into electrical energy.

The potential impact of these innovations is immense, with 17 million tons of textile waste deposited in US landfills annually, which can take over 200 years to decompose.

Companies like Circular System are producing natural fibers from agricultural waste, reducing the need for synthetic materials and promoting a more circular economy.

Venture capitalists are taking notice, with many investing in cleantech startups due to their potential to drive significant growth and returns.

Sweden is a frontrunner in cleantech investment, with SEB Greentech VC and Norrsken VC leading the way in providing patient capital to early and late-stage startups.

These investments are not just about financial returns, but also about addressing the urgent need for sustainable solutions to climate change and environmental degradation.

Investment in sustainable startups has seen a significant surge in recent years, with venture capital investment in cleantech exploding to $70 billion in 2022.

The global cleantech market is expected to reach $600 billion by 2030, with a CAGR of almost 6% between 2023 and 2027. This makes it an attractive investment opportunity for those looking to make a positive impact.

The average deal size in clean energy investment has jumped from $17 million to $53 million between 2019 and 2021, with battery technology receiving $5 billion in investments in 2022 alone.

Two-thirds of global VC energy funding in 2022 was invested in batteries and renewables, with investment in renewables technology tripling from $1 billion in 2021 to $3 billion in 2022.

Investment in hydrogen has been steadily gaining pace, with investment in hydrogen production technology rising from around $70 million to approximately $550 million between 2019 and 2022.

The Inflation Reduction Act of 2022 has set aside approximately $370 billion in funding for climate and clean energy projects, including funds for EV and battery manufacturing.

The EU's Net Zero Industry Act has also sweetened subsidies for clean energy investments, making it an exciting time for sustainable startups and investors alike.

Investors in North America were the primary drivers in clean energy investment in 2022, contributing $7 billion, or about 57%, of the annual total.

ETF Partners is a London-based sustainable innovation VC that invests in early and late-stage startups, backing companies like Dexter Energy and Open Cosmos. They recently closed their Fund IV at €285M.

GET Fund, formerly known as Munich Venture Partners, invests in European climate tech startups and has announced the first closing of their Fund I at €100M. Their first investment was Vamo, a €10M Seed round.

Carbon Removal Partners is a new climate VC focused on carbon removal, investing in companies like Climeworks and Greenlyte Carbon Technologies. They've also backed Ucaneo, a startup that received a €6.75M Seed investment.

ETF Partners is a London-based sustainable innovation VC that invests in early and late-stage startups.

They have a diverse portfolio of companies, including Dexter Energy, Aiperia, Open Cosmos, Shipzero, Zeelo, Worldsensing, Vulog, Flyability, and Urbantz.

In May 2024, ETF Partners announced the closing of its Fund IV at €285 million, a significant milestone for the venture capital firm.

Their investment focus is on sustainable innovation, which is reflected in their portfolio of companies working on climate tech and other environmentally-focused projects.

Planet First Partners is a growth equity firm based in London and Luxembourg that invests in European climate tech startups. They have a diverse portfolio that includes companies like Sunfire, Submer, Finn, and Nanogence.

One notable investment by Planet First Partners is Submer, which raised $55.5M in Series C funding in October 2024.

Innovation is the lifeblood of sustainability-focused startups, and VCs actively seek out companies that offer novel solutions to sustainability challenges.

VCs look for startups that challenge conventional wisdom and offer fresh perspectives, such as leveraging cutting-edge technologies or creating new business models.

Eneco Ventures is a great example of a venture capital firm that supports innovative startups, including Gradyent, 42watt, Klimate, and Solar Monkey.

Brill Power's mission is to harness the potential in novel battery management systems, improving performance and reducing costs of ownership.

ELM Mobility is focused on reducing the cost and energy use per delivery and the impact that last mile logistics has on our cities.

GeoPura is a UK green hydrogen pioneer scaling up to replace fossil fuels with zero-emission alternatives, using its world-leading Hydrogen Power Unit (HPU) technology.

Innovation is not limited to technology; it extends to business practices, supply chains, and customer engagement strategies, which is why sustainability-focused VCs are drawn to startups that can demonstrate a commitment to continuous improvement and creative problem-solving.

These startups are transforming traditional industries and making a significant impact on the environment, making them exciting investment opportunities.