Venture capital investment in climate fintech is accelerating due to growing interest from investors, start-ups and businesses, according to a new F10 report.
F10 is a global innovation ecosystem for fintech and insurtech start-ups, with hubs in Switzerland, Singapore and Spain.
Using data from over 400 climate fintech start-ups, the report finds that venture capital investment in climate technology nearly doubled between 2020 and 2021, with US$40 billion put into capital. more, and accounted for 14% of all venture capital.
Furthermore, investment in climate fintech grew with one of the highest compound annual growth rates in 2021 among all climate technology subsectors.
According to the report, ESG data and analytics solutions will grow the most, followed by digital investment solutions. This is due to companies wanting to measure their emissions and investors wanting to allocate capital to more sustainable fund options, he said, F10.
Despite these surges, Digital Risk Analytics and InsurTech will receive the highest share of funding at €716 million. The F10 notes that this is the result of merger and acquisition activity in this sector between financial institutions and insurers to mitigate climate change risks.
Europe leads regionally, but the US hosts the most climate fintechs by country. The report suggests this is due to more progressive European climate change financial policy decisions, including the European Green Deal, and the implementation of sustainable financial disclosure rules.
However, North America leads in total funding ahead of Europe, Middle East, Africa, Asia-Pacific and Latin America, with average total funding per climate fintech at €20 million, compared to €8 million in Europe. It’s getting closer.
Commenting on the findings of the report, F10 co-founder and CEO Andreas Iten said: Today, these terms encompass a space bursting with activity that includes hundreds of startups and the dozens of initiatives that support them around the world. ”