Climate Technology Industry

A SaaS company in trouble cuts marketing spend and headcount. A climate venture has all of that, plus inventory sitting in containers, panels in warehouses, and payments locked behind commissioning milestones. Last week’s post covered universal cost cutting lessons: Be decisive, treat people well on the way out. The climate-specific layer matters most to anyone building or backing a hardware-heavy business. Climate ventures carry complexity that software businesses do not. They manage manufacturing, inventory, deployment, hardware warranties, project financing, and working capital that sits in the system for months before revenue arrives. Where climate intersects with agrifood, you add the volatility of farmer income tied to a successful harvest. Unit economics can be strong. Growth itself still creates cash flow pressure. A solar company buys panels, batteries, and irrigation systems before installation. A low-emissions rice platform supports farmers through a growing season and gets paid after harvest. Land restoration and agroforestry can take years before revenues fully materialise. That changes every cost decision. Each dollar saved extends runway, reduces dilution, and gives flexibility on when to raise next. Which is why I keep banging on about better debt finance for climate tech in emerging Asia. Expensive and dilutive equity is not built to finance working capital. Inventory deserves a loan against the asset, at a rate that matches the cash flow. $50k to $200k loans exist through microfinance. $50M+ facilities exist for established infrastructure. A fast-growing climate company needing $1M to $5M is where the system breaks down. It is easier for a bank to write a $100M green loan to a property developer than a $2M working capital line to a climate startup creating real emissions impact. That slows company growth and more importantly, it slows climate impact. Fewer solar systems installed, fewer farmers reached and fewer tonnes of emissions avoided. So climate founders in emerging Asia get creative. Agros started with a loan from me and a small group of LPs, which catalysed a $2M facility from EDFI. WasteX secured a $460k grant from P4G for biochar adoption. Ampd Energy and Full Circle Biotechnology took loans from existing shareholders for working capital. Rize secured a $650k facility from Rabobank for smallholder rice farmers transitioning to low-emissions. SOLshare’s loan from us catalysed a refinancing at a lower rate from a local Bangladeshi bank. It is still mostly cobbled together. The asset class deserves better. Finance is a core capability far earlier than in software. Map every order, every shipment, every install, every payment date. Build the worst case. Plan a more aggressive runway than projections suggest. Most need a fractional or full-time finance director far earlier than a SaaS business would. In climate, cash management is the strategy.

🔥 The Future of Climate Tech: 5 Takeaways from Hello Tomorrow 🔥 Busy days last week at Hello Tomorrow in Paris—lots of discussions, strong opinions, and a fair share of debate on the past, present, and future of climate tech. Moderating a panel on the topic, I had the chance to challenge some of the sharpest minds in the space: Liza Rubinstein Malamud (Carbon Equity), Rajesh Swaminathan (Khosla Ventures), and Laurie Menoud (At One Ventures)—right on stage at Hello Tomorrow. So, where does climate tech really stand today? Here are 5 takeaways that stood out: 1️⃣ Climate Tech’s Darwinian Moment Laurie put it bluntly: climate tech isn’t dead, but many companies relying solely on subsidies will be gone in the next 1-2 years. The survivors? Those with better performance and lower costs than existing alternatives. Capitalism is simple—if oil makes money, that’s where it goes. Climate solutions need to be a no-brainer. 2️⃣ US vs Europe: be resilient The panelists emphasised the importance of building business models that can thrive regardless of policy shifts or geography. At the same time, Liza urged European founders to think bigger. Meanwhile, Rajesh reminded us that “yesterday’s tweet” shouldn’t dictate investment decisions—the real wins come from betting on long-term, high-impact inflection points. 3️⃣ What’s Hot, What’s Not This topic itself was hot—plenty of debate, opposing views, and strong opinions. But there was clear consensus on one thing: the only metric that truly matters is strong unit economics. Without it, even the most innovative tech won’t scale. And yes, AI is hot and can play a role in climate, but beware of “AI washing.” It works when it adds real value—think accelerating mineral detection for mining or power management for data centres. 4️⃣ Making Money with Climate Tech Liza, speaking as a fund-of-funds manager, was very clear: climate tech has performed on par with general VC and PE. Cambridge Associates and Dealroom data back this up—the returns are there. In their portfolio, TVPI looks strong, but there’s a catch: lots of unrealised returns. The big question? Will markets open up again this year? That remains to be seen. 5️⃣ The #1 Rule for Climate Founders Laurie’s advice? Forget politics. Focus on economics. The best solutions will win because they outperform and underprice existing options. Rajesh added: the team you build is the company you build—hire talent from industries that have scaled successfully before. And Liza? Plan your entire fundraising journey early—each stage demands a different strategy. 💡 The TL;DR? The market is tough, but winning in climate tech means playing the long game—building companies that make sense with or without policy tailwinds. Last but not least, a big thank you to Arnaud de la Tour, Selma El Ouardi, Jack Fox-Male, and the entire Hello Tomorrow team—great work, and see you next year in the Netherlands! 🇳🇱 #venturecapital #climatetech #liveandkicking

Very excited to share my most recent article in Forbes, focusing on the role of philanthropy in supporting climate innovation in emerging markets. Over the past few weeks, our team has had some great conversations with foundations and other partners who are supporting climate entrepreneurs in the some of the most vulnerable countries. Philanthropy is uniquely positioned to play a role here, but we need a wider aperture in terms of what it can and should do. The article proposes five areas where philanthropy can take on a wider agenda to not just fund more climate startups in these markets, but to build the talent pools and enabling ecosystems that support these companies. Here's a breakdown of the five areas: 1. New company building models: We don’t need just more climate entrepreneurship and innovation in developing countries, but we need it to be targeted at solving the most pressing problems. Purpose-built platforms - venture studios and builder models - can incubate startups with greater intentionality, offering technical capacity, market access, and tailored support that meet local needs. 2. Build fractional leadership networks: As much as more funding is needed to support climate startups in their early stages, matching them with the right talent at the right time can be critical. And there’s no guarantee that this talent is locally available. We need specialized programs that can match seasoned leadership - e.g. fractional CFOs, CMOs, and other C-level executives along with technical experts - who can provide critical guidance, strategic discipline, and credibility, making ventures more investment-ready and sustainable. 3. Ecosystem enablers and hubs: Climate tech benefits from enabling ecosystems, which often entail complex networks of universities giving birth to ideas, funds financing the development of prototypes, executive talent coming in from the corporate world and policymakers assessing how to incentivize the adoption of climate technologies. 4. Create linkages between emerging markets: Most funding, technology and talent transfer in climate tech tends to be concentrated between wealthy countries, but there are opportunities to strengthen ties between emerging markets themselves. Creating networks between regions fosters peer learning, market entry, and collaboration. 5. Prioritize adaptation and resilience: Often, adaptation and resilience (A&R) risks are the primary ways in which emerging markets first and foremost experience climate change. Increasing finance, company building and entrepreneurship support for A&R - health, disaster resilience, agriculture, and water - reflects the acute realities on the ground and brings direct benefits to vulnerable communities.

Impact startups in MENA are growing fast but funding strategies must evolve just as quickly. One of the questions I’m asked most often by founders is: “Where do we start when it comes to raising funds for climate or sustainability-focused ventures in this region?” Here’s how I usually break it down in 4 key pathways I’ve worked with or closely observed, each requiring a clear narrative, regional awareness, and the right positioning: 1. Government-backed innovation platforms These are not just about incubation, they are increasingly designed to de-risk startups and connect them to capital. 🔹 Example: Hub71 (Abu Dhabi) offers access to corporates, sovereign investors, and a growing base of VC partners through its Incentive Program. It's a launchpad for startups aligned with national priorities. 2. Climate-aligned positioning Framing your solution around climate resilience or adaptation is no longer optional—it’s a strategic funding move. 🔹 Example: ALTÉRRA, the $30B climate investment fund launched by the UAE at COP28, is designed to mobilize capital into areas like clean energy, food security, and nature-based solutions. Startups that clearly align with these priorities stand a stronger chance of attracting institutional and private funding. 3. Corporate sustainability partnerships Corporates in MENA are increasingly partnering with startups to accelerate their ESG goals—often offering pilot funding, technical support, or access to infrastructure. 🔹 Example: PepsiCo Middle East has launched several open innovation challenges in the region, focusing on sustainable packaging, water reuse, and food system transformation. These partnerships are a valuable entry point for startups ready to co-create scalable solutions. 4. Strategic VC alignment Venture capital in MENA is increasingly aligning with long-term sustainability themes—especially in climate tech and resource efficiency. 🔹 Example: VentureSouq, a MENA-based VC, launched its Climate Tech Fund I to invest in technologies tackling the climate crisis—from energy and mobility to the circular economy. They’re actively backing companies that blend strong commercial potential with measurable impact. The takeaway? It’s not just about raising funds, it’s about raising strategically. That’s how you align with where capital is moving in the region. If you found this useful, share it with a founder or ecosystem builder working on climate and impact in MENA. Let’s make these conversations more visible ;-) #ClimateFinance #MENA #ImpactStartups #StrategicFunding #GreenTransition #BusinessWithPurpose

This framework gives boards a practical way to integrate climate and nature into core decision-making. The framework from the World Economic Forum, developed with Deloitte, positions climate change and nature loss as factors that directly affect growth, capital allocation, and competitiveness. Climate and nature now influence where investment flows, which technologies scale, and which business models remain viable. Sectors across energy, finance, manufacturing, food systems, and technology are already being reshaped by demand for solutions that combine performance with sustainability. The framework challenges a common boardroom pattern. Climate and nature are still often handled as risk topics or reporting requirements. That framing no longer matches how markets behave. These forces are drivers of structural change, accelerated by geopolitical shifts, artificial intelligence, and regulation that is redirecting capital toward efficiency, resilience, and innovation. What makes the framework useful is its focus on how boards already operate. Climate and nature are embedded into four familiar responsibilities: oversight and responsibility, strategy, risk and opportunity, and disclosure and transparency. The objective is not to add new layers, but to sharpen how existing ones function. A core insight is that decision quality suffers when climate and nature remain abstract ambitions. Decision quality improves when they act as filters for strategy, investment priorities, incentives, and accountability. Three enabling conditions support this shift. Board-level skills and knowledge determine whether assumptions can be challenged with confidence. Stakeholder collaboration provides early visibility into dependencies, risks, and market signals beyond the organization’s control. Culture determines whether adaptive thinking and challenge are encouraged or avoided. The framework is deliberately practical. Each principle is paired with focused questions for boards and management, designed to test alignment between ambition and execution. The emphasis is on better decisions. Boards that apply this framework rigorously will be better positioned to manage risk, attract investment, and capture value as markets continue to evolve.

Climate tech faces a critical challenge: existing technologies alone can't solve the energy crisis. We need breakthrough innovations that can scale rapidly to deliver meaningful impact within the timelines we face. To help companies navigate these demands, our climate team has been using the U.S. Department of Energy (DOE)’s Adoption Readiness Levels (ARL) Framework, which moves the conversation beyond “can we build it?” to “can we build AND scale it?” By integrating considerations such as cost, resource availability, and regulatory support, the ARL framework helps make sure we're building cutting-edge climate tech that can have a real-world impact. In this recent whitepaper, cowritten with our colleagues at Boston Consulting Group (BCG), our climate team shares insights for investors and operators looking to put ARLs into action and efficiently bring their technologies to market. https://lnkd.in/gaARZvai Congratulations to Jeff Johnson, Mia Nixon, Vinay Shandal and Parham Peiroo on this excellent piece! Whether or not you're in climate, it's very much worth a read.

I tell every climate tech founder I meet: if you want to raise millions, your solution needs to be better, faster, or cheaper than whatever came before it. Full stop. Now, more than ever, climate tech companies cannot rely on regulatory support or favorable policy environments as their competitive advantage. Your innovation needs to compete purely on its intrinsic merits — delivering superior economics, unmatched efficiency, and undeniable value for your customer. The hard truth is climate impact alone will never compensate for subpar performance. To fully grasp this reality, we must reconsider what we mean by “climate” innovation. The term itself is often misleading, implying a singular sector. In truth, climate innovation represents a full-scale industrial revolution, one that touches every industry — agriculture, transportation, construction, manufacturing, consumer goods, energy production, and beyond. The most successful climate founders adopt a mandate to reduce emissions AND rebuild entire value chains to be radically more efficient at scale. That’s the unlock. I've found Collaborative Fund's "Villain Test" to be a helpful framework to illustrate this sentiment. The test poses a critical question: Would a hypothetical ‘villain’ investor, driven purely by financial returns and self-interest, invest in your company? A dual focus, 1) irresistible, scalable economics paired with 2) purpose-driven impact, is the driving force behind climate tech superstars like Antora Energy, Twelve, and Nitricity, to name a few. This is the blueprint. If you want to lead in climate, build products that dominate on performance and deliver planetary benefits as an essential byproduct. Of course, the path from idea to reality is much easier said than done. This isn't meant to discourage but rather offer a principled approach for thinking about how to identify problems and build climate companies that endure. Start with the problem. Design for performance. Make impact inevitable. P.S. Also sharing this as an excuse to post a favorite photo from my time in Stanford Climate Ventures, where our dream team worked on extreme heat solutions that outperformed the status quo in cost and effectiveness across a variety of applications <3 #Better #Faster #Cheaper #Climate #ClimateTech #ClimateInnovation #IndustrialRevolution #VillainTest #Startups #Founders

We had an amazing conversation with Kim Zou, CEO of Sightline Climate, this week, about venture/growth investment trends in climate tech. She spoke to us from London Climate Week, where she said that "this year feels completely different." For the first time, investors from the U.S., Middle East, Asia, and Canada are flocking to what's historically been a sleepy European conference. The reason? "Definitely pullback in the U.S." We're witnessing a geographic rebalancing. European companies that once came to America for growth capital are staying home. American investors are scouting European opportunities. And the conversations reveal a sector in the middle of what Zou calls a "trickier, tactical" recalibration. It was a really fantastic conversation. Here are some takeaways: 🎯 Tariffs worry investors more than IRA repeal. With 54% of climate tech companies having hardware components, complex supply chains are once again in flux. 💰 The "missing middle" is getting worse. Companies need $45-$100M to build first commercial facilities but face "venture-level risk with infrastructure-style returns." Meanwhile, the DOE – historically the bridge funder – is pulling back just as a "massive wave" of companies hit this critical gap. 📈 Acquisitions doubled, but at "opportunistic costs." Investment dropped 19% in H1 2025, but M&A activity surged – mostly at undisclosed valuations. Lots of bargains to be had for investors. ⚡ Some sectors are thriving anyway. Grid-enhancing tech had its best quarter ever, thanks to AI power demands. The winners: companies that save customers money rather than asking for green premiums. The voluntary sustainability market is "definitely drying up." 🌍 Europe's structural advantages are real. U.S. investors aren't just fleeing uncertainty – they're finding opportunities. Europe's funding gap starts earlier (Series A vs growth stage), and European LPs are still hedging against climate exposure. We're watching climate tech mature from hype-driven to pragmatic. The companies with clear value and realistic exit strategies are finding capital. For investors, the geographic arbitrage opportunities are real, but so are the trade-offs (regulatory complexity, higher electricity costs in Europe). Listen to the full episode for a breakdown of investor sentiment, deal flow, and geographic shifts: https://bit.ly/45LBJXa

Here are three ways that corporates can help speed up the availability of new climate solutions:   🚦 Collaborate with industry to send demand signals to de-risk new climate solutions. Developing new solutions involves a lot of R&D and risk - mostly, what's the market for this? Large companies can help de-risk that initial investment for startups and companies by creating a readied market of purchasers through Advanced Market Commitments and purchasing coalitions that say "we're committed to buying X when it's available." There are already nearly a dozen AMCs organized around different climate solution areas, including aluminum, concrete, steel, and more, organized by groups like First Movers Coalition and Climate Group.   🚀 Catalyze new and existing climate innovators by bringing them into value chain challenges. Instead of developing new solutions in-house, it can sometimes be better to bring in existing startups to work closely with business units. Support can include pilot funding, physical resources, networks, and access to expertise in addressing value chain challenges at scale. This could be done in collaboration, like 100+ Accelerator, through sponsored accelerators with groups like MIT Solve (e.g. Amazon's Devices Climate Tech Accelerator), or as an open innovation challenge with partners like IDEO. Not only does this bring early ideas to market quicker, it also sends a demand signal to VCs and other innovators that the need for solutions is real.   💸 Align venture capital investments and advocacy efforts with existing climate objectives. Many large companies have some kind of corporate venture capital arm that invests corporate funds into early-stage startups. That existing mechanism can be incredibly powerful when aligned with climate objectives. Often times the investment can help address the company's own climate-related solution gap, but also presents larger financial return opportunities for other companies in need of that solution now and in the future. That investment can also speed up the scale of early-stage ideas and get them to market quicker, in-part because of the growth capital invested.   The reality is that companies cannot achieve success in climate innovation alone. Climate innovation requires a robust ecosystem that shares risks and fosters collaboration, involving investors, governments, universities, startups, and more. Companies must actively engage in that ecosystem in order for us to bring new climate solutions to market at speed and scale.   Pages below are from the latest Unlocking Corporate Climate Innovation report, found here: https://lnkd.in/esVc8Ykr

The latest Council on Competitiveness report released seven pillars for keeping U.S. firms competitive on a global scale. Pillar 5 highlights an urgent national priority: deploying cutting-edge technologies at speed and scale to maintain the U.S.’s competitive edge. At Innosphere, I’m proud to say this has been our focus for over 20 years. We’re proud to be advancing this mission in three key ways: 1️⃣ Life Sciences Incubator - Economic Development Administration Funded over 7 States Innosphere’s Life Sciences Incubator sets itself apart by being directly accountable to the U.S. Economic Development Administration (EDA) for delivering measurable outcomes. Here’s what our most recent cohort achieved: -Created 62 full-time jobs in their first year, with an average salary of $107,000. -Secured $18.2M in funding. -Filed 5 patents and 34 provisionals, with 16 more in progress. -Built 55 strategic partnerships, with over half of participating startups forming at least one alliance. By focusing on outcomes, we’re helping early-stage startups grow, innovate, and create real economic impact. 2️⃣ NSF ENGINES: Colorado-Wyoming Engine: Digital Twins Deployment Accelerator Through our collaboration with Microsoft’s TechSpark program, we’re launching a Digital Twins Deployment Accelerator, a first-of-its-kind program designed to develop and commercialize digital twin technologies for climate resilience. This accelerator will support 8-10 startups in areas like renewable energy, water resource management, and carbon accounting - creating a new wave of innovation in climate tech. 3️⃣ Scale-Up Accelerator (Launching in 2025) Too few companies make it beyond the startup phase. That’s why we’re piloting a Scale-Up Accelerator through the NSF Engine, targeting climate tech companies ready to scale past $1M in revenue. This program is designed to bridge the gap for businesses poised for growth, ensuring they get the support they need to thrive. Innovation doesn’t happen in isolation. It requires intentional programs and partnerships that bridge industry, academia, and government. From fostering early-stage breakthroughs to scaling established businesses, Innosphere is actioning Pillar 5 by creating pathways for U.S. technology leadership.