It’s not a bad time to be a climate tech investor. Ever since COVID-19 started, it seems to be all the buzz (or maybe it is just the bubble in which I exist). How are we going to get out of this 2020 crisis? What is a safe bet at the moment? All arrows point to energy (and maybe cannabis depending on the VCs you follow). The New Green Deal…or is that deals?
I see this transitional period similar to the “water-energy nexus” trend I was part of nearly a decade ago. Conversations surrounding the intersection of using less water to produce more energy and using less energy to produce more water was all the rage in 2013. Sensors, meters, operational efficiencies, leak detection, Internet of Things were driving this “new” digital transformation. Today, I am surprisingly hearing many of the same pitches, just with a slight twist: a fintech twist.
What the heck is climatetech and how is it different from cleantech? I think Clean Energy Ventures sums up the difference in semantics nicely. For me personally, it’s a buzz word that refers to any technology solution that helps address the energy, water, deforestation, agriculture, or ecosystem imbalance our world is desperately facing today…but with a slight upgrade. It incorporates the intersection of operational efficiency, fintech, and legaltech.
Why am I investing in climatetech, specifically this niche that I define above? Besides my deep love for making operational systems work better, saving customers money, and building networks that connect people and institutions around the world, I am drawn to the climatetech space because it is quite literally the intersection of my two passions: natural resource management and investing. In an era in which our infrastructure is falling apart and our planet is on fire, many of the climatetech solutions are working towards:
1. Finding new ways to finance projects that increase access to capital for projects AND offer retail investors an alternative to the currently historic low returns of their bank accounts. Some companies in this space include: Fundeen, WaterWorks, RaiseGreen, InfraShares, AgroInvesting
2. Taking paperwork intensive, siloed processes and streamlining them through online marketplaces to automate business processes and to connect buyers and sellers. Some companies in this space include: Aqaix, Zeigo, LevelTen, Indigo.
Will these companies listed above all be unicorns? Maybe, but maybe not. If you talk to many of these founders that is not their end goal. Many are millennials whose mission is to democratize investment and to increase choice, efficiency, and visibility into this traditionally opaque sector. Therefore, I encourage you to join me. It’s an exciting time to be a climatetech investor, especially because the doors are opening up to everyone.