45%: the magic number by which greenhouse gas emissions must be reduced by 2030 to limit global warming to 1.5 degrees. It’s a tall order, but a growing army of climate tech startups are gearing up for the job.
Climate Technology: A Brief Overview
Climate tech has one mission, and one mission only: to reduce emissions by any means possible. It therefore includes a wide range of technologies, from renewable energy to carbon capture to environmentally friendly cement. But climate tech itself falls under the category of Greentech, which also includes any environmentally beneficial technology that doesn’t directly reduce emissions – think ocean cleanups or wastewater management. There’s also cleantech, whose definition often overlaps with Greentech but generally refers to tech that minimizes environmental impact while increasing efficiency (it might have a net-neutral impact, instead of a net-positive one like Greentech).
Climate tech is a relatively new trend. Its older sibling, cleantech, had its moment during the 2000s, fueled by growing climate awareness, governmental subsidies, rising fossil fuel prices, and investor hype. But it wasn’t to be. The 2008 recession, sinking oil prices due to fracking, cheap competition from China, and pricey, drawn-out development timelines led the first wave of cleantech to die a slow, painful death. What emerged from the ashes was climate tech: a focused effort to directly address emissions. This clear-cut goal is backed by newer legislation and incentives, such as the 2015 Paris Agreement and, in the US, the 2022 Inflation Reduction Act (IRA). The market is now dominated by the US, which leads startup investment almost by a factor of five, and China, whose solar panels and electric vehicles are the cheapest around.
The Growing Landscape of Climate Tech Startups
In 2021, the International Energy Agency (IEA) predicted that almost half of the technology needed to reach net zero emissions by 2050 was not yet on the market; two years on, that number has fallen to 35%. This progress mirrors the growth of startups and their newfangled tech creeping into the scene in recent years. Investment into climate tech startups increased sixfold from 2013 to 2022; while startup funding as a whole took a hit in 2023, climate tech was less affected by this than other industries. Still, this funding is not divided evenly. Most cash tends to go to renewable energy and electric vehicle (EV) startups: unsurprising given that they have a proven market. Batteries, which can store renewable energy for later use, are also a hot startup scene. But industrials and buildings – which, together, generate up to 51% of emissions – receive comparatively tiny slices on investment. Some climate startups address this by removing carbon from the cycle and selling it as offsets to polluting companies; this market has been boosted by the IRA, which, depending on the industry and removal method, grants tax credits of up to $85 per ton of carbon removed.
Renewable Energy Climate Startups
1. Antora Energy
- Location: US
- Founded: 2017
- Number of employees: 135
- Current funding level: Series B
- Amount raised (USD): over $230 million
- Latest funding type: $14.5 million grant from the Advanced Research Projects Agency—Energy (ARPA-E)
- LinkedIn: https://www.linkedin.com/company/antora-energy/
Overview: Battery specialist Antora hopes to address those pesky industrial emissions; as it describes, its service ‘bridges the gap between renewable energy and industrial manufacturing’. Since renewable energy comes from natural sources, its availability is unreliable. Antora’s thermal batteries store renewable energy in the form of heat, which is then used in industrial processes. This climate startup has launched its first commercial-scale battery and is building its first large-scale manufacturing facility.
2. Fervo
- Location: US
- Founded: 2017
- Number of employees: 99
- Current funding level: Series C
- Amount raised (USD): $431 million
- Latest funding type: $244 million funding round
- LinkedIn: https://www.linkedin.com/company/fervo-energy
Overview: Having cut his teeth in the oil and gas industry, Fervo co-founder Tim Latimer now focuses his expertise on a rather obscure renewable energy source: geothermal. This method – heating water under the Earth, then collecting that energy as steam overground – only constitutes half a percent of energy used worldwide since it’s so region-specific and expensive. Fervo’s drilling technique, akin to fracking, allows access to deeper sources of energy, broadening the scope of where it can be deployed.
3. Zanskar
- Location: US
- Founded: 2018
- Number of employees: 37
- Current funding level: Series B
- Amount raised (USD): $45 million
- Latest funding type: $30 million in Series B round
- LinkedIn: https://www.linkedin.com/company/zanskar/
Overview: Zanskar has another idea to boost the geothermal method: using AI to scope out juicy sites to drill for it. Drilling is expensive, so much so that it’s not worth it unless a site is guaranteed to pay off. Zanskar’s AI tries to solve this issue by analyzing mountains of data from satellites, geological surveys, and its own exploratory drilling to spit out suggestions of where to start digging (as reported by Forbes).
Read also: Top 5 Renewable Energy Startups in 2024
Carbon Capture and Storage Climate Startups
4. CarbonCapture
- Location: US
- Founded: 2019
- Number of employees: 68
- Current funding level: Series A
- Amount raised (USD): $134 million
- Latest funding type: $80 million in Series A round
- LinkedIn: https://www.linkedin.com/company/graphytecarbon
Overview: CarbonCapture builds artificial trees: container-sized boxes that soak up CO2 from the atmosphere (a method known as Direct Air Capture, or DAC). It plans to open its Project Bison plant in Wyoming in 2025, which, if everything goes to plan, would remove 5 million tons of the toxic gas a year by 2030. Its modular DAC units, called Leo, are described as the company as the ‘first US DAC system designed for mass production’, each capable of removing 500 tons a year.
5. Graphyte
- Location: US
- Founded: 2023
- Number of employees: 10
- Current funding level: Series A
- Amount raised (USD): $30 million
- Latest funding type: $30 million in Series A round
- LinkedIn: https://www.linkedin.com/company/graphytecarbon
Overview: Graphyte made headlines when it snagged funding from Bill Gates-backed venture fund Breakthrough Energy Ventures, the beefiest climate-tech fund around. And yet, its carbon capture method is simple: drying and encasing agricultural waste products in a resin and storing them underground – forever. This way, the plants don’t decompose and release their stored CO2 back into the air. CEO Barclay Rogers claims that the company has the world’s cheapest removal method at $100 a ton, which can be deployed at scale.
6. BurnBot
- Location: US
- Founded: 2022
- Number of employees: 8
- Current funding level: Series A
- Amount raised (USD): $26.1 million
- Latest funding type: $20 million in Series A round
- LinkedIn: https://www.linkedin.com/company/burnbot-inc/
Overview: BurnBot fights fire with fire. A worsening climate goes hand in hand with wildfires, which destroy the most common carbon removal method in use today – trees – and release thousands of tons of CO2 to boot. To prevent them, BurnBot creates ‘prescribed burns’: small, controlled fires that limit the amount of fuel available to real wildfire. It does this via drones or its RX1 truck, which leaves behind a sooty black trail on the fields it torches. This startup also offers remote-controlled masticators (which crush trees into wood chips) to thin out the fuel.
Read also: Top 5 Carbon Capture Startups in 2024
Sustainable Agriculture and Food Tech Startups
7. Aleph Farms
- Location: Israel
- Founded: 2017
- Number of employees: 103
- Current funding level: Series B
- Amount raised (USD): $118 million
- Latest funding type: $105 million Series B round
- LinkedIn: https://www.linkedin.com/company/aleph-farms/
Overview: Aleph Farms grew its first lab-cultivated steak in 2018. Six years on, it received approval from the Israeli government to sell its products to the public: a first for lab-grown beef. When it’s raised naturally, beef can produce 101 kilograms of CO2 are produced per kilo of edible weight; as the company points out, scaling the lab-grown meat industry with renewable energy (as Aleph plans to do) would produce 92% fewer greenhouse gases than traditional methods.
8. Rize
- Location: Singapore
- Founded: 2023
- Number of employees: up to 50
- Current funding level: Series A
- Amount raised (USD): at least $14 million
- Latest funding type: $14 million Series A round
- LinkedIn: https://www.linkedin.com/company/rizefarm/about/
Overview: An unlikely polluter, rice makes up 1.5% of greenhouse gas emissions and up to 12% of methane emissions alone: a problem set to worsen as global rice consumption grows. Rize wants to tackle this problem with a set of farming tricks that reduce the amount of water used and makes the fields less hospitable for methane-producing bacteria; it incentivizes farmers by selling them farm supplies at a lower cost than local stores (as reported by Japan Times). It also sells the methane reductions as carbon credits.
Read also: Top Sustainable Tech Companies & Startups in 2024
Waste Management Climate Startups
9. Winnow
- Location: UK
- Founded: 2013
- Number of employees: 145
- Current funding level: Series C
- Amount raised (USD): $44.8 million
- Latest funding type: 10 million Series C
- LinkedIn: https://www.linkedin.com/company/winnow-ltd
Overview: Food waste accounts for some 6% of global emissions, and it’s Winnow’s mission to lessen that. Whenever something is dumped into the smart bins it installs at restaurants, its AI Winnow Vision scans the waste and analyzes its worth, helping the kitchen plan better. The system is installed at over 2,700 kitchens, including IKEAs across the UK, which had halved its food waste in 2022.
10. Farm to Feed
- Location: Kenya
- Founded: 2020
- Number of employees: up to 10
- Current funding level: Early stage
- Amount raised (USD): at least $230,000
- Latest funding type: unknown sum from Renew Capital
- LinkedIn: https://www.linkedin.com/company/farm-to-feed/
Overview: Farm to Feed has a different way of tackling food waste: finding new markets for imperfect produce. It sources this from farmers directly, sorts it in its warehouse, and sells it online. This startup claims to have avoided the release of 1,000 tons of CO2 this way, while giving farmers a 41% boost in income.
Why Might Companies Be Interested In Investing in Climate Tech Startups?
Climate tech startups present a quick and easy way for companies to join the climate action without doing the heavy lifting themselves. Startups are young, sprightly, and full of life; they bristle with innovation, but are often strapped for cash. More established companies, meanwhile, are bogged down by corporate processes and lack this maneuverability, but have plenty of dough to pay for startups’ ideas (often through venture arms). These partnerships are seen across all sectors of climate tech, but are especially prominent in the fossil fuel or automobile industries, with companies including Volkswagen, Volvo, and Stellantis (parent of a sizeable group of car companies) investing in battery, supply chain tracing, and hydrogen startups, respectively (as reported by Sifted).
There are a few reasons why they might do this. Most obviously, investing in this tech helps reduce emissions, but there’s more to it than that; as the climate tech business grows, companies can get a slice of the industry by backing startups. In regions with tax cuts for use of certain climate tech, bigger companies can snag these by investing in startups that specialize this technology, potentially saving money in the long run. But perhaps most importantly, investing in and working with climate tech is great PR; consumers verifiably care about sustainability and believe that the bulk of responsibility for addressing climate change lies on companies. By outsourcing this to startups rather than reshuffling their own practices, they can have this for less.
Read also: Top 11 Climate Tech Companies in 2024
Challenges and Opportunities in Climate Tech
Clearly, these perks make for a pretty sweet business case for climate tech startups – not to mention the impact of the climate itself. The more it deteriorates, the higher the demand for abating technologies – though their popularity is often determined more by the ease of their application, profit margins, or compatibility with existing industries rather than actual emissions reductions.
If only it were that simple. Climate tech, for all its merits, is often eyewateringly expensive to develop, not to mention implement; also, its notoriously lengthy development timelines might put off investors who’d like a quick return on their funding. Coupled with the hype surrounding much of the technology – which, given its status potentially civilization-saving, is to be expected – this can be deadly; in fact, it was part of what brought cleantech 1.0 down the first time around.
In addition, there needs to be incentives. Many of the trends supporting climate tech’s current boom, like tax cuts and the carbon credit market, are backed by governmental programs that invested billions into the effort. If this support wanes, maybe due to changing leadership or shifting priorities, there’s much less reason to invest in climate tech. Also, as reported by The Nation, many of these investing companies are fossil fuel giants, who tend to open their overflowing wallets only to technologies that might take years to have an impact and won’t threaten their business, like carbon capture or green hydrogen, leaving less funding for the most critical technologies.
Read also: Top 6 Clean Tech Companies & Startups in 2024
The Future of Climate Tech Startups
When it comes to their tech alone, climate tech startups have reason to be optimistic; our planet is sick, and their products could be the cure. It seems a surefire business case, and it is; unlike other sectors, which relies on the ebbs and flows of their industries, climate tech is driven by a real global crisis that demands action.
But whether or not these trends translate to the industry – that’s the tricky bit. Because despite its existential importance, the industry under the hood of climate tech is still, well, an industry; profits, tax cuts, and investments tend to take precedence over the ailing planet. And it doesn’t help that some of the world’s biggest polluters are holding the purse strings. Naturally, therefore, it’s not climate change driving trends in the sector, but the market (as reported by The Nation). And the discrepancy between the health of the industry and that of the climate is stark; despite gaping holes in technology needed to address certain climate trends, such as adaptation methods, the climate tech industry itself is nonetheless thriving. So it seems its future is in safe hands – even if the climate might not be.
