Extreme weather events and soaring global temperatures have thrown climate tech into sharp focus. Environmentally conscious investors have been turning to companies solving the world’s climate challenges in growing numbers. In fact, crowdfunding for climate tech businesses increased by 154% on the Seedrs platform in 2022, according to our annual sector report.
The report, which analysed over £500m of investment across 324 campaigns, found that £40.1m was invested in climate tech companies in 2022, up from £15.7m the year before. The growth is part of a wider trend, with PwC reporting that 25% of all venture funding globally went into the climate sector this year.
The growth isn’t just in the dollars invested. The Seedrs report shows that the number of businesses operating and investing in the space is on the up as well. In fact, 58% more climate tech funds were raising capital year-on-year, with the number of investors up 37% over the same period.
The international energy crisis and the immediacy of the climate catastrophe are likely factors driving investors to back businesses that are creating sustainable solutions. Indeed, the push for cleaner energy, which is both affordable and more accessible for consumers, is a key battleground for many companies operating in the sector.
One such business is Ripple, a company opening up access to clean energy ownership to everyday consumers and businesses. Its model enables households and businesses to part own large-scale wind farms, with green electricity supplied to them via grid and utility partners. Ripple tells us they plan to do the same for solar farms in the near future, and with 6,000 households already on its books and £2.1m raised on Seedrs in its most recent round, the company is gaining all-important traction.
Sarah Merrick, CEO of Ripple, said: “This year demonstrated the significant benefits of moving away from fossil fuels towards clean energy. The energy price crisis, driven by war in Ukraine, has amplified the understanding that clean energy can be a cheap source of electricity and provide stable prices for climate-conscious, price-sensitive consumers. We build online communities of wind farm owners, so being funded by a community is a fantastic base to help us further our mission.”
The community point is an all-important one — and with public interest in sustainability peaking alongside their utility bills, it could be a pivotal moment for the industry.
Seedrs CEO Jeff Kelisky tells us that as consumers become increasingly concerned with where their energy comes from, investors are looking to back businesses that are at the forefront of driving the transition to more accessible, affordable and greener sources of energy: “The ensuing energy crisis has put alternative energy sources at the vanguard of politics and venture capital. As consumers become increasingly concerned with where their energy comes from, investors are looking to back businesses that are at the forefront of driving the transition to more accessible, affordable and greener sources.”
Climate tech: From macro to micro
While the energy crisis is on the minds of consumers (and investors) at a macro level, there are also some interesting consumer trends playing out in the crowdfunding space. Electric vehicle charging is a hot topic — in 2022, there were 250,000 EVs registered in the UK alone. That’s 25% of the total market.
To use the old gold rush analogy, it’s those selling the shovels that stand to profit, and with over 100 home charging providers operating in the UK it’s rapidly becoming a confusing space for consumers. Companies like Rightcharge are working to simplify things, with its mission boosted by a £468,000 raise on Seedrs last year.
Interesting trends are also emerging in both our wardrobes and our bathrooms. The direct-to-consumer fashion market has shifted over the past year, with second-hand apparel becoming a global phenomenon; the resale market grew 24% in 2022 and is expected to reach $218bn by 2026.
Companies like Vinted and Depop have become household names, and UK-based Thrift+ raised £1.5m in December to continue to build their managed marketplace.
The toilet roll industry makes for another interesting case study — it’s a market expected to be worth $27bn in 2025. You’ll no doubt have come across companies like Who Gives A Crap and The Cheeky Panda, both continuing to build market share in a space dominated by big pharma. The latter’s sustainable bamboo toiletries are so popular that they’re now valued at £85.5m after a recent £750,000 crowdfunding campaign.
Download the full Seedrs 2022 Sector report here.
In paid partnership with Seedrs.
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