The Boom and Bust of Climate Tech
Few sectors have boomed in the past few years like climate tech has. But despite the burgeoning urgency driving interest and investments, the ongoing market downturn is threatening to dim the prospects of many bright startups.
Are climate tech VCs as gloomy as the rest? A recent panel at TC Sessions: Climate 2022 shed some light on this question. Three investors active in the space shared their insights on why they’re in it for the long haul, the problems they’re looking to tackle, and how they find the startups poised to make an impact.
Breaking Free from Past Mistakes
After the clean tech bust a decade ago, and given the current downturn, there are concerns that climate tech may be doomed to repeat the mistakes of the past. Christian Garcia, a partner at Breakthrough Energy Ventures, said there might be some casualties, but overall, that won’t be the case.
"Climate tech is here to stay," Garcia emphasized. "There’s a little bit of a difference, which I agree with — the opportunity is bigger, right? We rebranded it because it’s about transitioning to clean energy and mitigating climate change."
Garcia believes that the current market downturn presents an opportunity for climate tech startups to focus on building sustainable businesses rather than just chasing short-term gains.
Focusing on Sustainable Solutions
Kiersten Stead, co-founder of DCVC (Data Collective Venture Capital), shared a similar view. "We’re not here to make quick returns," she said. "We want to invest in companies that are creating long-term value and contributing to the transition to clean energy."
DCVC has a strict investment criteria, focusing on companies that have a clear path to commercialization without requiring significant additional funding. Stead emphasized the importance of investing in startups with strong financials and a robust business model.
Nuclear Energy: A Key Player in Climate Tech
SOSV (Sherpa Partners), another prominent climate tech investor, has made significant investments in nuclear energy startups. The firm’s co-founder, Sean O’ Sullivan, believes that nuclear power will play a crucial role in decarbonizing the grid.
"Nuclear is one of the cleanest forms of energy," he said. "It’s scalable, and it can be built anywhere."
SOSV has invested in companies like TerraPower, which is developing advanced nuclear reactors designed to produce electricity while minimizing waste.
Why Climate Tech Will Thrive
Despite the challenges facing climate tech startups, the panelists remained optimistic about the sector’s future. Garcia emphasized that the current market downturn will weed out weak startups and drive innovation among those with strong fundamentals.
"We’re not here to make quick money," he said. "We’re here to build sustainable companies that contribute to a cleaner energy future."
The panel at TC Sessions: Climate 2022 highlighted the importance of investing in climate tech startups with strong financials, robust business models, and a clear path to commercialization. As the market continues to fluctuate, these fundamentals will become increasingly important for success in the sector.
What’s Next for Climate Tech?
As the world continues to grapple with the challenges of climate change, one thing is certain: climate tech startups will play a critical role in driving innovation and transition towards a cleaner energy future. With the support of investors like Breakthrough Energy Ventures, DCVC, and SOSV, these startups are well-positioned for success.
Don’t miss our conversation with Kiersten Stead and Christian Garcia at TC Sessions: Climate 2022.
Top Investors in Climate Tech
Breakthrough Energy Ventures
DCVC (Data Collective Venture Capital)
SOSV (Sherpa Partners)
More on Climate Tech
To stay up-to-date with the latest news and trends in climate tech, follow these top publications:
TechCrunch – www.techcrunch.com
Ars Technica – www.arstechnica.com
The Verge – www.theverge.com
Get Involved
If you’re passionate about climate tech and want to get involved, consider attending TC Sessions: Climate 2022. The event features a panel with Kiersten Stead and Christian Garcia, as well as other industry leaders and innovators.
Don’t miss out on the opportunity to connect with top investors, entrepreneurs, and thought leaders in the climate tech space.
