The “Climate Fintech Report 2024”, published by CommerzVentures, an independent Venture Capital firm, reveals that in 2023 European climate fintech investments are again dominating in funding compared to US counterparts.
Compared to the overall VC market downturn, which recorded a drop of 38 per cent year-over-year, climate fintech investment volume was not affected by these instabilities and changes in 2023, reaching $2.3 billion (a decrease of 19% compared to a year before).
Funding volume in Europe
As stated in the report, the European climate fintech companies raised 1.5 times more VC funding in 3.3 times more financing rounds, compared to the US. Speaking in numbers, in 2023 the European climate fintech companies raised $1.4 billion, while their US counterparts raised $881 million.
In terms of funding rounds, Europe is also leading with 76 more (109 funding rounds in Europe and 33 in the US).
Funded companies by Stage
Analysing the funding by stages, it looks like climate fintech is no longer an emerging sector, as 69 per cent of the companies are at an early stage.
The report states that out of all companies that have raised funding in 2023, 42,3 per cent are in the Pre-Seed or Seed stage, 26,2 per cent raised a Series A, and 31,5 per cent raised a Series B or later.
Funding volume by Space
The most attractive space for VC in climate fintech is carbon markets. According to the report, carbon markets startups have attracted the most funding in 2023, over $720 million. Energy management and carbon accounting are right after, with $530 million and $333 million raised in total, respectively.
An example of the companies that contributed to these numbers, is a London-based Opna which, in September 2023 raised $6.5 million to boost its financing platform for global carbon projects, aiming to help businesses meet net-zero targets. Similarly, Klimate, a Copenhagen-based startup, secured €3.5 million in seed funding for its CO2 asset management platform.
Funding volume by country
Germany-based climate fintech startups raised the most funding in Europe, with $710 million, thus taking over the leading position from the UK, which comes to second place, with $210 million raised.
They are followed by France ($134 million), Finland ($77 million) and Denmark ($56 million).
Among some of the interesting deals in 2023 should be mentioned Sweden's ClimateView which raised €14 million last year. The company aims to use the funding to fuel the development of its own climate finance platform and to 'support cities in their climate investment planning needs as part of the EU’s innovative program - 100 Climate-neutral and Smart Cities'.
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