Why climate tech urgently needs more funding and how to secure it

climate tech

The world is grappling with the pressing challenges of climate change and the development and deployment of innovative technologies are essential to mitigate its impacts and promote sustainable growth. Achieving net zero emissions by 2050 requires a significant increase in annual clean energy investment, estimated to triple by 2030 to around $4 trillion. 

This substantial investment is necessary to scale renewable energy production, develop advanced energy storage solutions, and foster business sustainability and innovation in sectors, such as electric vehicles and smart grids. Continue reading as we explore the critical need for funding for climate tech and strategies to secure funding. 

The critical need for funding in climate tech 

Funding in climate tech is critically needed to accelerate the development and deployment of technologies that can mitigate climate change and support sustainable growth. According to a report by the International Energy Agency (IEA), achieving net-zero emissions by 2050 will require annual clean energy investment to triple by 2030 to around $4 trillion. This massive investment is essential to scale up renewable energy production, develop advanced energy storage solutions, and innovate in sectors such as electric vehicles and smart grids. 

Moreover, climate tech funding is vital for fostering innovation and driving economic growth. A study by PwC highlights that despite significant investments, climate tech still represents a small fraction of total venture capital funding, with about $87.5 billion invested in 2020, which is only 6% of the global venture capital funding. Increased funding can accelerate the commercialisation of breakthrough technologies, create green jobs, and position economies to lead in the emerging green economy. 

For example, the European Union’s Green Deal aims to mobilise €1 trillion in sustainable investments over the next decade, recognising the need for substantial financial resources to drive climate innovation. Substantial funding in climate tech is imperative to meet global climate goals, stimulate economic growth, and foster innovation. Ensuring adequate financial resources will enable the rapid development and deployment of technologies necessary to transition to a sustainable, low-carbon future.

Strategies to secure funding for climate tech 

Securing funding for climate tech requires a strategic approach that leverages various sources of capital and showcases the potential impact and scalability of the technology. Here are some strategies for effectively securing funding for climate tech ventures. 

Diversify funding sources

One key strategy to securing funding for climate tech is diversifying funding sources. Many venture capital firms and private equity investors are now focusing specifically on climate tech. Firms such as The Rise Fund and Breakthrough Energy Ventures are dedicated to investing in sustainable technologies

Demonstrating a strong business model and scalable technology can attract these targeted investment funds. Government grants and subsidies are other options. Governments worldwide offer grants, tax incentives, and subsidies for climate tech initiatives. For example, the European Union’s Horizon Europe programme allocates substantial funds for research and innovation in green technology. 

Engage in public-private partnerships

Another critical strategy for securing funding is collaborating with corporations. It is increasingly common for large corporations with sustainability goals to invest in climate tech startups to enhance their own green initiatives. 

Moreover, partnering with established companies can also offer market access, technical expertise, and validation. These collaborations can accelerate the commercialisation of climate tech solutions. 

Leverage impact investors and philanthropy

Impact investors seek to generate social and environmental benefits alongside financial returns. Therefore, it may prove easier for climate tech startups to attract the attention of these investors. Moreover, philanthropic organisations and non-governmental organisations often provide grants and funding for technologies that address climate change

Crowdfunding and community investment

Platforms like Kickstarter, Indiegogo, and specialised climate tech crowdfunding platforms allow startups to raise small amounts of money from a large number of people. This approach also helps startups build a community of early adopters and supporters. 

Community investment funds enable local stakeholders to invest in projects that benefit their area, fostering local support and engagement. These funds can be particularly effective for projects such as community solar initiatives. 

Highlighting impact and scalability

Finally, it is essential to demonstrate the market potential, scalability, and financial viability of the technology. Investors are more likely to fund projects that reveal a clear path to profitability and large-scale investment. 

Quantifying the environmental and social benefits of the technology will also make a compelling case to both impact investors and traditional investors searching for sustainable initiatives to support. 

Case studies of successful climate tech funding 

Below are some case studies of successful climate tech funding, showcasing diverse strategies and considerable impacts. 

Beyond Meat

Beyond Meat raised significant funds from venture capital firms such as Kleiner Perkins and Obvious Ventures. This initial funding helped the company scale its production and distribution capabilities. In 2019, Beyond Meat went public, raising approximately $240 million through its IPO. 

This provided the necessary capital to expand its product lines and reach a broader market. Beyond Meat’s funding strategy enabled it to rapidly scale and commercialise its plant-based meat alternatives. This success has contributed to reducing the environmental impact of meat production and has driven innovation in the alternative protein market.


Ørsted, formerly known as Danish Oil and Natural Gas (DONG), transformed from a fossil fuel-based energy company to a leading renewable energy provider. This transformation involved significant investments in offshore wind projects, supported by both private and public funding.

Ørsted has also utilised green bonds to finance its renewable energy projects. In 2017, it issued green bonds worth €1.25 billion to fund its wind energy initiatives. Ørsted’s strategic funding and investment in renewable energy have made it a global leader in offshore wind energy. Its projects have significantly contributed to reducing carbon emissions and promoting the use of clean energy.

Impossible Foods

Impossible Foods has raised over $1.3 billion from venture capital firms and private investors, including Khosla Ventures and Bill Gates. This funding has supported research and development, production scale-up, and market expansion. 

The substantial funding has allowed Impossible Foods to innovate and produce plant-based meat alternatives that closely mimic the taste and texture of animal meat. This success is driving consumer adoption and reducing the environmental footprint of food production.

Form Energy

Form Energy has raised over $120 million from investors including Breakthrough Energy Ventures and Prelude Ventures. This funding supports the development of its innovative long-duration energy storage technology.

Form Energy’s funding has enabled the development of a new class of energy storage systems that can provide long-duration storage at a lower cost. This technology is critical for integrating renewable energy into the grid and ensuring a reliable energy supply.

Key takeaways

The successful funding of climate tech ventures is pivotal for achieving global climate goals and fostering sustainable economic growth. Diverse strategies, engaging in public-private partnerships, leveraging impact investors and philanthropy, and utilising crowdfunding platforms are essential for securing the necessary financial resources. 

Case studies of companies like Beyond Meat, Ørsted, Impossible Foods, and Form Energy demonstrate the impact that strategic funding can have on advancing climate tech. By continuing to support and invest in climate tech, we can accelerate the transition to a sustainable, low-carbon future, creating a resilient economy that benefits all. 

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