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Tracking the Innovators: A Spotlight of the Most Inspiring ClimateTech Startups of 2023
ClimateTech companies have attracted significant investment in recent years as they work to address the urgent need for sustainable solutions in areas such as clean energy, transportation, and agriculture. The largest climate tech fundraisings up to 2023 include companies such as Xpansiv, Arcadia, and Sweep, all of which have secured funding rounds of $100 million or more.
Last month, BloombergNEF published its “12 Climate Tech Innovators Building a Net Zero World” list for 2023, ranging from startups recycling plastics and battery metals to clean fuel producers, farming drones manufacturers, and “wildcards” — ideas that seem impossible but have the potential to disrupt the future.
That, and the fact that the climate tech sector appears to be maintaining traction and only gaining momentum despite the Silicon Valley Bank’s shocking downfall in March and the overall downturn in the tech industry, has inspired us to come up with this publication.
ClimateTech vs. GreenTech
In the sustainability field, terms like “CleanTech,” “ClimateTech,” and “GreenTech” (aka clean, climate, and green technology) are often used interchangeably (as we do as well). Yet, they have noteworthy differences: GreenTech focuses on reducing the environmental impact of products and processes, while ClimateTech solutions aim to directly address the impact of climate change.
The two fields overlap in areas like supply chains, transportation, environmentally-friendly structures, and clean energy.
Niche software solutions and ClimateTech companies to keep an eye on in 2023 (because VCs do)
European venture capitalists invested €6.9 billion (about $7.3 billion) in the sector in March through 250 deals. So far this year, there have been 28 rounds with a combined value of €261.6 million (around $288 million) in 2023, according to data from PitchBook.
But what is it that attracts investors to impactful sustainability startups? The Recursive asked European early-stage VC investors, and it comes out they are looking for:
- Entrepreneurs with a strong drive to bring their vision of a better world to life;
- Scalable, innovative digital technologies with a unique approach to tackling climate-related issues;
- Solutions addressing overlooked challenges in fields such as built environment, transportation, and scarcity of resources;
- Mitigation solutions that incorporate climate resilience and adaptation;
- Measurable impact (e.g., reductions in carbon dioxide emissions);
- Sustainability-oriented startups with solid funding and sales strategies that can generate ROI and be financially sustainable.
The above criteria are valid for the tech industry in general; plus, they resonate very well with the qualities we seek in potential partners and our mission of being an impact-driven, future-oriented company. Lastly, by following the investor’s gaze, we can spot the potential “Teslas of tomorrow” and the “next big thing” (or a few) in the industry. So here is our list of ClimateTech companies to keep an eye on.
Reimagined cities and living
Asset Market: SaaS-based smart city technology
Asset Market is a Canadian B2B software and services platform that connects organizations seeking to install EV chargers, telecoms, and IoT devices with owners and land operators to accelerate the delivery and deployment of smart and connected services. The platform aims to support the potential of 5G, IoT, and innovative technologies to revolutionize various aspects of society, such as healthcare, logistics, energy, and commerce. According to Asset Market, their service helps reduce the time associated with finding a suitable location to place the devices by 80%.
Hived: Zero-emission parcel delivery
Hived, a London-based parcel service provider, builds a zero-emission delivery network and uses emission-free vehicles (electric vans and bikes) for every collection and delivery. Its digital platform is integrated with Metapack, Shiptheory, and Shopify, allowing clients to manage all orders and shipments in one place. By leveraging vertical integration, operational process innovation, and software, the company aims to help businesses and customers reduce their carbon footprint without compromising convenience or affordability.
Reusables: A container-sharing platform for takeout food, coffee & groceries
While many takeout cups and containers are claimed to be recyclable, 86% of them end up in landfills. Reusables.com equips food businesses with climate technology to replace single-use containers with tech-enabled packaging (reusable stainless steel vessels) paired with proprietary tracking software to reduce packaging waste. Food deliveries, containers, and returns are managed through a user-friendly app that unites partner networks of restaurants, food vendors, and delivery companies with the customers.
Method Recycling: “The Internet of Bins”
The New Zealand-based Method Recycling has recently introduced InSight, an Internet of Things (IoT) solution that simplifies recycling and waste management for organizations. The solution, which utilizes Microsoft Azure and Microsoft Power BI, can weigh every Method bin in a workplace and provide data on waste and recycling through interactive dashboards.
Resourcify: An intelligent waste management platform
A German startup, Resourcify, offers an all-in-one waste management and recycling solution designed to automate disposal and improve recycling. The company’s innovative platform provides information on waste collection, segregation, and containers with complete transparency and control over users’ waste management cycle. Businesses can connect digitally with local disposal companies and streamline their waste-related accounting, reporting, and compliance requirements.
Community, B2B, and infrastructure solutions
Greener: Ecommerce decarbonization for “Green Economy”
Greener assists companies in engaging with environmentally-conscious consumers by evaluating their sustainability status, facilitating practical measures towards achieving net zero emissions, and rewarding their achievements. Additionally, the company offers a consumer app that highlights the sustainable practices of various brands, enabling shoppers to track the carbon footprint of their purchases and offset emissions.
My Net Zero: Employee engagement and sustainability platform
My Net Zero addresses this decade’s major trends: environmental sustainability and employee engagement. The solution provides consulting, a tech platform, and tools for all stakeholders (employees, consumers, students, and members) to take action on their Sustainability Plans. It helps connect employees to the organization’s environmental vision and mission, create personalized employee roadmaps to take climate action, offers a marketplace to support their efforts, and provides innovative schemes to offset home emissions.
Xpansiv: A one-stop center to trade carbon, RECs, water, and digital fuels
Xpansiv facilitates the global transition to renewable energy through its market infrastructure. Their central business hubs include CBL, the biggest spot exchange for environmental commodities (carbon credits and renewable energy certificates (RECs)); SRECTrade, a top transaction and management firm in the solar renewable energy market; APX, the provider of registry infrastructure for energy, power, and environmental markets, and H2OX, a spot exchange for Australian water allocations. Xpansiv also provides market data and operates a portfolio management system for environmental commodities.
Arcadia: Software and APIs to manage utility and clean energy data
Arcadia is an innovative tech company dedicated to supporting private and corporate climate action. Their cutting-edge sustainability data platform, Arc, provides high-resolution utility data, energy analytics, and tariff calculations, helping businesses and consumers with energy solutions, sustainability tracking, and service optimization. Using their robust datasets and calculation capabilities, Arcadia has developed a range of API-based solutions suitable for businesses across many industries.
Enode: SaaS platform to optimize energy infrastructure
Enode is a Norwegian developer of a digital infrastructure software platform that optimizes energy consumption with out-of-the-box algorithms, enabling clients to facilitate a zero-carbon energy grid. Enode’s API connects 300+ energy devices, such as EVs, solar inverters, home batteries, thermostats, and other energy assets, into one hardware network, allowing users to control and manage these assets through user-friendly apps.
ProducePay: A digital agriculture marketplace
ProducePay is an American fintech and digital marketplace platform that gives farmers access to the market and financial solutions, offers trade protection, and connects them directly to the end buyer. In addition, ProducePay provides data insights on the commodities that users buy and sell, with updates on prices, movement, and more, as well as in-depth market data on the global produce industry.
Connect Earth: Carbon tracking solutions for the financial sector
Connect Earth, a UK-founded startup that collects carbon data on financial transactions, secured $5.6 million in funding in March 2023. They’re actively expanding to the US and Europe, aspiring to “clean up” the financial sector. Connect Earth’s carbon tracking APIs enable it to embed carbon footprint insights into day-to-day financial transactions and financial products and to estimate specific investments’ emissions. They mainly cater to FinTechs, ClimateTechs, impact and investment platforms, and like-minded businesses.
Next-gen fuels and mobility
Amogy: Emission-free ammonia fuel for commercial transportation
Founded in 2020, the Brooklyn-based Amogy has raised more than $200 million in three years, according to Crunchbase. Its recent $139 million funding deal closed in March 2023 signals that the company captured investors’ eye for a reason: Amogy is building ammonia-to-power tech and launching its first product to market that will bring the maritime industry closer to clean energy.
WeaveGrid: Data products to enable rapid EV adoption
WeaveGrid’s enterprise SaaS serves as a platform integrating data from utilities, automakers, and drivers to help utilities manage the load that electric vehicles (EVs) place on the grid. The software builds around telematics — the onboard computers and communications tech inside EVs — to collect information needed to manage smart-charging programs. The solution combines world-class software, machine learning, and data technology.
What can AI do for ClimateTech?
At the time when these lines are being written, AI startups receive huge weekly investments — you can almost set your watch by it. The trend sparked in January 2023 with Microsoft’s $10 billion investment in OpenAI, the creators of ChatGPT, and the investment frenzy shows no signs of slowing down.
In the world of ClimateTech, however, there’s a pressing question: is AI part of the solution to combat climate change or part of the problem, considering its immense environmental impact?
A recent Stanford University study revealed that the AI chatbot ChatGPT’s training caused emissions equivalent to 9 cars. OpenAI’s GPT-3 model reportedly released 502 metric tons of carbon and used 1,287 megawatt-hours of power during its training. The energy consumption of AI raises environmental concerns as supercomputers used to train models require vast amounts of silicon, plastic, and copper. The AI industry’s competitive nature exacerbates the issue, with the demand for chips increasing due to the AI arms race, resulting in a substantial carbon footprint.
Yet, there’s a silver lining regarding AI’s contribution to the environment. The AI industry needs to emphasize energy efficiency in hardware and software design to keep things moving in the right direction by using more energy-efficient processors or algorithms that don’t require as many calculations and powering the computing infrastructure with renewable energy. The good news is that this trend is already starting to catch on in many data centers and, apparently, will continue to grow in the future.
Examples of disruptive AI-powered ClimateTech software
Plexigrid: AI-backed energy grid management
A Spanish climate tech company, Plexigrid, raised €4.5 million (around $5 million) in April to facilitate the reduction of energy consumption. Their AI-powered software solution helps electric grid operators to automatically adjust clients’ energy consumption based on the usage in their area: they can increase electricity supply when the demand is low and decrease it when there’s a demand to prevent grid bottlenecks. It’s reported that the software can reduce grid costs by up to 40%.
Dexter Energy: AI-based renewable power generation forecasting
Netherlands-based scaleup, Dexter Energy, secured €10.5 million ($11.6 million) in funding this April to expand their AI-based renewable energy generation forecasting solution for short-term power trading. The solution leverages advanced machine learning algorithms and big data analytics to help energy providers manage their short-term trading activity while maintaining a 100% renewable portfolio. Product developers say it has led to up to 35% cost savings. Dexter Energy’s platform supports over ten weather and multiple power forecast models and is easy to use with a modern RESTful API approach.
Carbon Re: AI-powered decarbonization software
The British climate tech company Carbon Re has a promising outlook this year thanks to their unique and easy-to-implement solution for curbing carbon emissions in energy-intensive industries (such as glass and cement production). Carbon Re’s advanced deep-learning AI enables plants to reduce fuel inputs by up to 10%, leading to noteworthy reductions in emissions and operational costs.
Unlike many innovations in this sector, Carbon Re’s solution is easy to scale, which translates into cost savings from day one of implementation.
Partnering for change
In a world aiming to reach the ambitious net-zero goal by 2050, collaboration between companies, organizations, and even governments holds immense importance as we achieve planet-positive goals. Partnerships align organizations towards shared goals, inspire, and amplify our collective voice, enabling greater influence and advocacy for sustainable practices.
At Beetroot, we’re passionate about building tech for good and making a positive difference in the world. By partnering with like-minded entrepreneurs and teams, we can bring diverse perspectives and expertise to the table, resulting in practical solutions to real-world problems. So if this is the path you’re on, let’s walk together.