Time and again, we’ve seen excitement build around new technologies—the railroad, electricity, the personal computer, fiber optics, e-commerce. Early investors place risky bets on seemingly oddball ideas. As a few gain traction, the money (and the hype) follows. As a market develops, large investors—venture capitalists, private equity firms, Wall Street—pile in and help scale up technology.
A similar dynamic is unfolding today in climate tech. Fifteen years ago, solar power plants and electric cars were marginal players with poor business prospects. But years of successful innovation, iteration, and improvement coupled with a pervasive sense of urgency to deal with climate change have spurred an investment boom. PwC’s State of Climate Tech 2020 report found that in 2013, a mere US$418 million globally was invested by venture capital (VC) firms into companies offering decarbonization solutions. In 2019, that investment had risen to $16.3 billion—a stunning 3,750% increase.