A new breed of founders using data to help the planet (and their backers)

As a startup investor, I love learning about new spaces where problems can be solved through software.

Since these white spaces can be found in any industry, I deeply believe in a founder-first investment strategy; I think founders are much better than investors at identifying opportunities. All we can do is follow them and learn from those who spend more time than us spotting problems, getting smart about them, and coming up with compelling solutions.

More often than not, these talented founders travel in packs: from those individuals building software to reshape the Future of Work, to those working on Mental Health tech solutions, as well as those building Community Tools. The list goes on…

One of these spaces — in which I’m seeing an increasing number of remarkable people building meaningful companies — is Climate Tech Software, spurred by a couple of important trends:

I’ve spent some time crafting a list of 80 unique companies that caught my attention in the space, and a couple of investors who are mostly, or entirely focused on it.

My plan is to keep updating this post on a regular basis, so that it can become the go-to piece for the sector. If you’re building a company that you think should be included, let me know!

1. Climate Tech Software Startups

Note: This post’s definition of Climate Tech is limited to companies using software and data to fight Climate Change. In a future post, it could also include other areas like Sustainable Food & Agriculture, Green Energy etc. Many of the startups listed sit across multiple categories. I chose one for each, for simplicity. This is not an attempt at including every single company in these categories — many companies are missing — but rather a selection of the independent, private, and usually venture-backed ones I know and find interesting.

⚠️ If you’re more of a spreadsheet person than a «logo map» person, you can find the full list of 80 companies I looked at here. I included their backers / funding amounts and tried to personalise the description of each company to make it clear why it fits into its category️ ️️⚠️

Click to access the full spreadsheet

1.1. Carbon Offsetting — Consumer

Individual climate engagement seems to have just hit an inflection point, with more and more consumers concerned about climate change. A lot of great companies have been popping up as a response in the last couple of years, to help consumers understand and reduce their carbon footprints. Notable examples:

➡ Instant Offset

➡ Real Time Tracking

1.2. Carbon Offsetting — Business

An even larger number of companies came to life in the last few years to tackle the problem from a B2B perspective, which makes sense as (i) it’s the right thing to do (just 100 companies have been the source of more than 70% of the world’s greenhouse gas emissions since 1988), and (ii) businesses in the world are facing increasing scrutiny from consumers, employees, investors and regulators to take climate action and increase transparency around ESG (Environmental, social and corporate governance) reporting. Notable examples:

➡ Carbon Offsetting & ESG Reporting — B2B SaaS

➡ Carbon Offsetting — B2B API / Marketplace

➡ Carbon Offsetting — B2G

1.3. Sustainable Neobanks

Neobanks have been around for several years now, from mass market ones like Revolut & Monzo, to more nichey ones like Vybe, targeting teenagers. A new wave of them has been generating a lot of consumer traction in recent years; neobanks built with sustainability and climate awareness in mind from day 1. Notable examples:

1.4. Materials / Supply Chain Intelligence

Both regulatory and consumer demand is on the rise for sustainable materials and transparency around production / supply chains. This was accelerated in all industries by the current pandemic. With global travel halted, fairs around materials cancelled and employees forced to work remotely — brands, suppliers and manufacturers need solutions to source materials and manage relationships with suppliers in a completely digital environment. Notable examples:

1.5. Investment Platforms / Data Services

Climate change has become a defining factor in companies’ long-term prospects, and the evidence on climate risk is compelling investors to reassess core assumptions about modern finance. A couple of platforms were born in recent years to educate and assist investors around the topic. Notable examples:

1.6. Growing Money on Trees

Finally, a bunch of innovative founders are offering consumers fun and engaging ways to plant trees around the world and contribute to carbon offsetting. Notable examples:

2. Climate Tech Software Investors

If you’re a founder launching a company in the Climate Tech Software space in 2020/2021 and looking for funding, you’re in for a fun ride, as there is a large multitude of investors across the globe you could raise from:

2.1. Generalist VCs

Given the trends we described above, Climate Tech Software is becoming quite hot from an investor’s point of view. It is very likely that no ‘generalist’ VC fund will rule you out because ‘you’re tackling climate change’. This makes your startup compatible for a huge number of Pre-seed & Seed funds. If you need examples, check the ‘investors’ column in the spreadsheet above.

2.2. Impact VCs

Impact funds have been around for decades. Many of them look for companies ‘making money while saving the world’. All of the categories above fit the bill for this criterion, so Impact VCs could be a great addition to your cap table. There are many lists of these out there (examples here and here). Here’s a few that launched recently:

…And if VC funds are not enough, here’s a list of 50 high net worth individuals investing in ventures striving to have a positive social or environmental impact.

2.3. Climate Tech VCs

More and more great funds are being launched to focus mostly, or entirely on Climate Tech Software.

⚠️ Here is an incredible list of Climate Tech VC funds, published by the team at Climate Tech VC a few weeks ago. ⚠️

Here’s a few that launched recently:

Regardless of whether you’re a founder or investor —and whether you’re actively looking at this space or not from a business standpoint — I’d recommend spending some time thinking about how your startup / fund could itself contribute to reversing the climate crisis, as this is one of the most critical projects humanity will have to face 🌲

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