Corporates hungry for cleantech startups

All over the world, cleantech-focused entrepreneurs are increasingly being sought out by major corporations hungry for innovative solutions that address the climate crisis. With both capital and connections at their disposal, these corporate investors provide a valuable pathway towards scaling up green technologies on an unprecedented scale.

As Climate Tech VC newsletter reports, overall investments last year were about $40 billion, spread over an astonishing 1,000-plus deals. That latter stat spiked more than 40 percent in 2022 versus 2021, reflecting the diverse universe of climate tech innovation.

Climate tech, despite being affected by the contraction in startup funding in 2022, was able to hold its ground thanks to a diverse range of innovation and a significant increase in the number of deals. According to Climate Tech VC, the total investments in climate tech last year amounted to $40 billion spread over more than 1,000 deals. This is a 40% increase in deals compared to 2021.

Interestingly, a significant portion of this funding did not come from traditional venture capital firms but from corporate venture arms such as ABB Technology Ventures, managed by Swiss engineering firm ABB, and SE Ventures, the venture arm of digital automation and energy management company Schneider Electric.

According to BloombergNEF, as of December, ABB had invested at least $100 million in 10 startups, including energy analytics firm Tallarna, battery-maker Northvolt AB and green hydrogen venture Hydrogen Optimized.

The total figures for corporate venture money focused on climate tech in 2022 have not been published yet, but it is expected that they will mirror the trend seen in 2021 where corporate funds invested $23.2 billion in climate tech, double the amount in 2020. Some of the most active corporations in this area include Cemex, A.P. Moller-Maersk, United, Amazon, Microsoft and General Motors.

Large corporations are investing in climate tech as a means to accelerate the development of technologies that could contribute to corporate emissions reduction targets and for the potential of mainstream adoption and acquisition in the future. However, this approach is not the only solution, as multinationals are also sponsoring startup accelerator programs to assess the scalability of these technologies.

One of the most well-known corporate climate tech accelerator programs is the 100+ Accelerator, launched in 2018 by Anheuser-Busch InBev and supported by AB InBev, Coca-Cola, Colgate-Palmolive and Unilever. This initiative provides a six to eight-month field pilot for chosen companies, which are funded up to £100,000. If the project proves successful, the corporate sponsor will explore ways to scale it up, according to AB InBev CSO Ezgi Barcenas.

Last fall, the program announced its largest cohort yet, with 46 startups selected from over 1,700 applications, Barcenas said. (The accelerator has previously worked with around 70 companies, making this a significant expansion.) More than 200 people were involved in screening and interviewing the applicants. Barcenas explained that while her team designed and manages the program, it is the people who will benefit from these innovations that are sourcing the solutions.