Largest Investments in Europe go to Sustainable Startups

Sustainable Startups are hot! European startups innovating in climate infrastructure have garnered more attention from investors in 2023. The four largest investment rounds in 2023 were all in companies engaged in climate innovations.

Climate infrastructure encompasses a broad range of techniques, from large-scale energy storage with batteries to charging networks and hydrogen transport. Generally, these are sustainable, capital-intensive technologies that require significant space.

Costly and Extensive
Traditionally, businesses involved in this sector are not very attractive to venture capital investors due to high costs and space requirements. Last year, investments were primarily directed towards fintech companies, which predominantly offer online financial-technical services and are easier to finance due to the absence of large-scale hardware.

Sustainable Startups: Focus on Climate Tech
However, this year in Europe, the landscape is different. The four largest investments, totaling over €3.5 billion, were made in climate infrastructure. Examples include H2 Green Steel (a startup producing steel with hydrogen), Northvolt (Europe’s largest battery builder for electric vehicles), and Zenobe Energy (a developer of battery storage networks). Of the 20 largest European investments in 2023, half were allocated to climate tech companies.

Climate Goals
This is good news, as investments in such technologies are crucial to achieving the Paris Agreement’s climate goals. Coenraad de Vries, co-founder of sustainability investor StartGreen Capital, recently confirmed this need, stating to Change Inc.: “Two major streams of money are needed. One is for the energy infrastructure, meaning project financing for the generation, transport, storage, and use of sustainable energy. The other consists of risk investments in new inventions, climate tech.”

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