At this year’s Collision event, a clear message emerged from industry experts: cleantech is no longer a niche market, but a mainstream investment opportunity with significant growth potential.
The sector has evolved beyond early stage venture capital funding, now encompassing a wider range of investment channels. From infrastructure projects like modernizing power grids and developing sustainable transportation systems, to energy storage solutions and eco-friendly buildings, the cleantech sector is poised for a new era of investment.
In a panel discussion at Collision, which ran from June 18 to 20 in Toronto, Canada, Andrew Beebe, managing director at Obvious Ventures, compared cleantech’s early days to those of the internet — there wasn’t much investment interest. In fact, he recalled, venture capitalists initially didn’t even know what the internet was.
“And then like two years later, they all had internet funds. And then two years after that, they stopped calling them internet funds, because they were just funds, they were just technology — because the internet was clearly going to be part of the global fabric of our economy. And I think the same thing is happening in climate,” he said.
DCVC partner Rachel Slaybaugh noted that mainstream investment in climate solutions is increasing as their economic benefits become clearer. She pointed to electric vehicles (EVs) as a compelling example, saying they offer a lower total ownership cost and a positive driving experience. In her opinion, this shift reflects a growing understanding of the economic viability of climate solutions, moving beyond early adopters driven by a desire for impact.
Chante Harris, founder and managing partner at Eunoia, echoed that statement during a separate panel. “When I think of conscious investments, I think about how we are building both towards returns and impact,” she said.
She went on to say that in recent years there has been a surge in venture capital funding for cleantech.
“Seventy percent of all venture capital last year went into climate technology, a huge win for the space. At the same time, two-thirds of that actually went into hardware,” Harris told listeners at the conference.
This surge in venture capital funding has coincided with various policy and market drivers; Harris said that in the US over US$300 billion has been committed to climate solutions through the Inflation Reduction Act, the Chips Act and the Bipartisan Infrastructure Law, which contain provisions that could indirectly lead to environmental benefits.
Harris also highlighted the importance of cleantech for corporations seeking to achieve net-zero goals, emphasizing that they are essential for companies to meet their objectives.
Among the cleantech investment opportunities discussed at Collision was nuclear fission, especially micro and small modular reactors, which will be able to help fill growing demand for clean power.
“If we can make it work, there’s a real chance to have the economics of hydrogen be really transformative,” she said.
Curtis VanWalleghem, co-founder and CEO of Canadian energy storage startup Hydrostor, highlighted the challenges associated with wind and solar energy while showcasing his company.
He emphasized their unpredictable nature, which can lead to curtailment during periods of surplus and intermittency when wind or solar energy availability is insufficient. He identified a need for new long-duration storage solutions.
“Historically, people think of storage (and) they think of lithium-ion batteries and pumped hydro. And those are the two kinds of leading storage solutions, but they do have limitations. Lithium-ion batteries degrade, they’re pretty costly to build and they have a short life. Pumped hydro, on the other hand, uses a lot of water, a lot of space and it’s very challenging to find sites where you can build additional ones,” he told the audience at Collision.
Hydrostor’s Advanced Compressed Air Energy Storage technology uses water pressure to store compressed air, releasing and combining it with stored heat to generate electricity. “The big advantage versus lithium-ion is our system lasts 100 years and never degrades, and to add an hour costs US$50 per kilowatt hour of storage capacity. A lithium-ion costs about US$300, it lasts 10 years and fades every year that it’s operating,” said VanWalleghem.
The company has an operational facility in Ontario, and in a few months will begin construction of a plant in Australia that will power a small mining town with 100 percent renewable energy. Projects are also set to begin in California next year.
“Our business plan has us in the next 15 years contracting and starting construction on 100 of these advanced compressed air energy storage facilities,” VanWalleghem said.
While emerging clean technologies are gaining traction, established cleantech solutions are also seeing continued advancements. John Rizzo, chief technical officer at InductEV, highlighted how his company is developing wireless chargers to address insufficient charging infrastructure, which is hindering the widespread adoption of EVs.
“Our approach is to charge the vehicles wirelessly while they’re going about their route. Imagine a bus that’s going about its route stopping at a bus station, or imagine a loading truck going to a loading dock, stopping for 45 minutes, and it’s charging then,” he said, noting that this allows for much more flexibility.
“We’ve got power in the right places,” he said. “So what we’re doing now is learning how to control the power and create a charging network across the (United Kingdom).”
“We’re one of only two companies in the US to receive what we call our airworthiness criteria from the FAA. We have received our part 135, which allows us to operate commercially; we received our part 145, which allows us to repair our own aircraft, and this year we are moving into what we call our four-credit flight testing with the FAA.”
Speaking about the Archer Midnight, which has been described an an electric air taxi, Nolen emphasized how its distributed propulsion — six five-blade motors on the front and six two-blade motors on the back — results in a significantly reduced failure rate compared to helicopters, which have just two motors.
Discussions at Collision highlighted the increasing mainstream interest and investment in cleantech. The potential for economic viability and the growing demand for clean energy solutions are driving significant venture capital funding into the market, with a focus on clean sources of fuel and transportation and innovative energy storage solutions.
The emergence of new investment opportunities in cleantech underscores the shift towards sustainable and impactful investments that not only aim for returns, but also contribute to environmental benefits.
As the world continues to prioritize environmental sustainability and climate action, it’s evident that cleantech is becoming an integral part of global investment strategies. The ongoing commitment to advancing climate solutions and the development of innovative technologies will play a crucial role in shaping a more sustainable future.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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