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Hello reader,
Climate change is a real and scary problem. Here in Singapore, the days have been blistering hot recently. I don’t remember the weather being this scorching 10 years ago, and I worry about what the world will be like for future generations. Is it going to be some Mad Max-esque wasteland?
That’s why climate tech startups are so important. While we have the science to create some truly transformative solutions, these companies still need money to turn their visions a reality. However, the public sector alone can’t support this growing industry, and this is where the private sector needs to step into the picture.
Today we look at:
- What needs to be done to address the climate tech funding gap
- An Indian agritech firm’s series A funding haul
- Other newsy highlights such as GoTo’s private placement of shares and GXBank’s insurance partnership
Premium summary
The climate tech funding gap
Image credit: Timmy Loen
Climate tech is important, but the sector struggles to get the funding it needs. There’s a private funding gap of approximately US$2 trillion in the industry, according to global consulting firm Deloitte. How can we fix this?
- Demystify: Climate tech solutions often involve complex technologies, and startups in the space can find it difficult to explain the mechanics underpinning their solutions. By being transparent and open about the science and processes behind what they do, founders can more easily persuade investors that their ideas are feasible.
- De-risk: Climate tech can seem like a high-risk space, which makes investors wary. Startups can mitigate this in a number of ways, such as developing resilient and stable supply chains, reducing dependence on partners through vertical integration, and diversifying their pool of clients.
- Design: Climate tech firms take a longer time to break even and scale compared to other tech segments. The traditional 10-year VC fund model may not be the best choice, and investors need to get creative and design fund mechanics to account for climate tech’s unique challenges.
Read more: Climate tech has a bankability problem, but there are 3 ways to fix that
Startup spotlight
Dance of the super plum startup
Image credit: Timmy Loen
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