The Climate Tech Landscape: Evolving at a Rapid Pace
The Climate Tech landscape is evolving rapidly, with investments, innovations, and collaborations making waves globally. During our recent webinar, I had the pleasure of moderating a conversation with key industry experts, where we explored lessons learned in 2024 and the trends that will shape 2025.
Meet the Panelists:
- Murat Aktihanoglu: Co-founder and Managing Partner at Remarkable Ventures Climate. Murat brought insights from over 15 years of investing in climate tech and emphasized emerging investment trends.
- Ellen Pizzuto: Executive Director at J.P. Morgan’s Climate Tech team. Ellen shared her expertise in financing and scaling climate tech companies through commercial banking and strategic advising.
- Guy Cherni: Co-founder and Managing Partner of Climate First. Guy discussed strategic investments in industrial transformation and the growing role of corporate collaboration.
Our Presenter:
- Andrea Canepa: Co-founder of Net Zero Insights. Andrea set the stage for the discussion by presenting key findings from the State of Climate Tech 2024 Report.
Setting the Stage: Key Findings from the State of Climate Tech 2024 Report
To kick off the webinar, Andrea Canepa provided an insightful overview of the latest trends and data from Net Zero Insights’ State of Climate Tech 2024 Report. Here are the key points Andrea highlighted:
- Funding Resilience: While global equity funding dropped to $46 billion in 2024 from $54 billion in 2023, Europe and the US demonstrated resilience. Equity funding in Europe declined by only 3%, and the US actually saw a 4% increase.
- Non-Dilutive Funding Gains Importance: Andrea emphasized the role of grants and debt financing, which boosted overall capital raised in 2024 to levels higher than in 2023. He highlighted that large infrastructure rounds, primarily in physical technologies like batteries and solar panels, drove this growth.
- Corporate Partnerships: Corporates played a pivotal role in supporting climate tech. Surveys revealed that 60% of corporations plan to increase their M&A activity, while many are also doubling down on partnerships with startups.
- Optimism for Future Funding: Andrea shared that 70% of investors expect more capital to flow into climate tech in the coming years, with 55% predicting moderate increases and 30% anticipating significant growth.
For more details, you can download the full State of Climate Tech 2024 Report and watch the webinar recording here.
Lessons Learned from 2024
Our panelists shared a range of insights about what 2024 taught the climate tech sector. Here are the key lessons we discussed:
1. Resilience is Key to Success
Ellen Pizzuto noted how essential resilience is, especially when facing unpredictable market conditions.
“The importance of building resilience into your company, both from a financing perspective and in terms of unit economics, cannot be overstated.” — Ellen Pizzuto, J.P. Morgan
In 2024, many companies learned that resilience in multiple parts of the business provided flexibility and options when facing unexpected challenges. The focus on having a solid financial plan and adapting to market dynamics helped many startups navigate turbulence, emphasizing the importance of strategic planning.
2. Strategic Assets and Reindustrialization
Guy Cherni highlighted the strategic shift governments and corporations are making in securing assets that will support long-term competitiveness.
“It’s all about strategic assets, stupid. Countries and governments are now heavily investing in strategic assets that in turn drive reindustrialization and decarbonization.” — Guy Cherni, Climate First
The deglobalizing world has led to an increased focus on securing strategic assets. Governments and corporations are now prioritizing investments in areas that support long-term competitiveness, particularly in industrial transformation and clean energy.
3. Geopolitical Factors Influence Climate Tech Growth
Murat Aktihanoglu pointed out how geopolitical events have accelerated investments in clean technologies, particularly in Europe.
“The anticipation of policy changes in the US led to a temporary pause in 2024, but now we’re seeing an acceleration in investments and doubled efforts from the private sector.” — Murat Aktihanoglu, Remarkable Ventures Climate
Geopolitical dynamics, such as the energy crisis stemming from Europe’s reliance on Russian gas, have driven significant investment in clean energy technologies. Non-dilutive funding and innovation from academic institutions have been major growth drivers in Europe, positioning it as a leader in climate innovation.
Future Outlook for 2025
Looking ahead, our panelists identified several trends that will shape the future of climate tech.
1. AI and Data Centers Will Be Key Drivers
Murat predicted that AI and data center expansion will be major growth areas in 2025.
“Generative AI is driving massive growth in compute loads, and data center expansion is inevitable. This presents both challenges and opportunities for climate tech solutions to optimize energy use.” — Murat Aktihanoglu, Remarkable Ventures Climate
As data centers continue to proliferate due to AI-driven demand, opportunities abound for startups offering energy optimization, storage, and sustainable infrastructure solutions. Major players like Microsoft and OpenAI are allocating billions to expand data center capacity, creating a ripe market for innovation.
2. Blended Capital and New Financing Mechanisms
Ellen stressed the importance of blended capital structures, combining equity, debt, and non-dilutive funding.
“Equity is an expensive way to fund everything. The blended capital stack, including debt, equity, and non-dilutive funding, needs to mature further to support the scaling of climate tech projects.” — Ellen Pizzuto, J.P. Morgan
Although progress has been made in addressing the financing gap for first-of-a-kind (FOAK) projects, much work remains. Panelists emphasized the need for more innovative financing tools, including catalytic capital, donor-advised funds, and partnerships with public and private entities. As the industry matures, blended capital structures will become crucial to funding large-scale projects efficiently.
3. Global Collaboration is Crucial
Guy emphasized that collaboration between Europe and the US will be a key driver of growth.
“Collaboration across regions, particularly between Europe and the US, will drive climate innovation at scale. Partnerships with corporates and local entities are essential for expanding globally.” — Guy Cherni, Climate First
The panelists highlighted the importance of transatlantic collaboration, with Europe leading in non-dilutive financing and the US driving technological breakthroughs. Emerging markets, though facing financing challenges, are critical for the global transition, and more capital needs to be directed toward supporting these regions.
Audience Outlook for 2025
At the end of the webinar, we surveyed the audience to understand their outlook for 2025. Here’s what they had to say:
- Very optimistic: 5%
- Cautiously optimistic: 68%
- Neutral: 5%
- Somewhat concerned: 18%
- Very concerned: 5%
The majority of participants remain cautiously optimistic about the future, reflecting the ongoing belief in the potential for growth despite the challenges ahead. This optimism is a testament to the resilience and adaptability within the climate tech ecosystem.
Closing Thoughts: Optimism and Challenges Ahead
As I wrapped up the webinar, it was clear that optimism for the future of climate tech is high, but so are the challenges. Scaling new technologies, accessing capital, and navigating regulatory hurdles will require collaborative efforts across sectors.
“We strongly believe that 2024 and 2025 will be the best vintage years for climate tech investing in history.” — Murat Aktihanoglu, Remarkable Ventures Climate
At Net Zero Insights, we’re committed to supporting this growth through actionable data, strategic partnerships, and ongoing engagement with the global climate tech community. I’m excited to see what the future holds.
For more details, you can download the full State of Climate Tech 2024 Report and watch the webinar recording here.
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