Climate Tech: Riding the Wave of Investment
Unleashing the Potential of Climate Tech Why it's the Perfect Time for VC Investment
Climate tech is primed for investment, says VC
Venture capital investors may be tightening their belts in this economic downturn, but one sector is still managing to ride the wave of funding – climate tech. While VC and private equity investment has fallen by 40% in 2023, climate tech is faring better than other segments of the tech industry. In fact, leading Dutch climate tech VC SET Ventures recently raised a whopping €200mn for its fourth fund, doubling the size of its previous fund. This news has brought a glimmer of hope to the world of climate tech and the energy transition.
So, what does it take to be a VC in the world of climate tech? TNW sat down with Anton Arts, Managing Partner of SET Ventures, to delve into the world of venture capitalism and the enormous opportunities arising from our move towards a net-zero future.
“It’s a bit of a funnel,” Arts explains when discussing the process of selecting companies to back. “The first thing we ask is: does this fit into our scope?” SET Ventures focuses on digital technologies that advance a carbon-free energy system. They look for solutions that not only have a market opportunity but also move the impact needle.
But it’s not just about finding exciting opportunities; it’s about competition among investors. With the flight to quality, startups that meet stringent criteria can have their pick among suitors. “There is intense competition between investors,” says Arts. And with climate tech moving from a niche to a mainstream market, founders have their decisions to make.
“What problem is this solving? Why this, but also, why now?” These are the questions that always come up. Arts explains that climate tech investors need to be willing to make a bet on something that the rest of the world hasn’t seen yet. It’s about skating to where the puck is going and believing in the potential that others don’t see.
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And the potential is enormous. The International Energy Agency (IEA) predicts a huge market opportunity for clean technologies. If the world reaches net-zero emissions by mid-century, the annual market for wind turbines, solar panels, batteries, and more will grow tenfold to $1.2 trillion by 2050. Clean technologies have the potential to outgrow the current oil industry.
Arts emphasizes that this transition to the energy system of the future is a generational opportunity of magnitude. He believes that climate tech is the category where the return expectations will be similar to the tech business in the past. The time is now, and the opportunity is here.
As a VC in climate tech, SET Ventures believes in the fast-changing world and the energy transition as the driving force behind future markets. They focus on value migration from physical assets to a collection of digital solutions that form the energy system. Their portfolio includes companies like Sensorfact and Energyworx, which help reduce energy waste and provide data management solutions, respectively. They also invest in innovative companies like Instagrid, which offers a portable power system for professionals working off-grid.
So, if you’re a technology fan with a passion for climate solutions, it’s time to keep an eye on climate tech. The opportunities are growing, and the impact potential is immense. Don’t miss out on this wave of investment and innovation.
Are you excited about the world of climate tech? Let us know your thoughts in the comments below!
