According to CommerzVentures’ second report on climate fintech, venture capital (VC) funding for fintechs driving net-zero economies hit a record high in 2021.
Surveying a clutch of climate fintechs across Europe and North America with scalable business models, the report makes six key findings:
- At $1.2 billion in 2021, VC funding for climate fintech was three times higher than in all previous years.As a comparison, prior to 2021, all 292 firms identified in Europe and North America raised $400 million.
- Europe is ahead of the US in terms of total funding volumes - standing at $624 million versus $576 million. The US, however, enjoys a higher average funding per company.
- 68% of climate fintechs are at the seed and pre-seed stage.
23% have raised a Series A, and 9% a Series B, or later.
- Carbon offsetting and carbon accounting are the most densely populated sub-categories.
CommerzVentures identifies 101 startups in carbon offsetting; 68 in carbon accounting; 29 in impact investing; 27 in ESG reporting; 21 in climate risk management; 17 in each of the sustainable banking and supply chain analytics groups; 7 in impact financing; and 5 in carbon credits trading.
- B2B climate fintechs raised almost six times more funding in 2021 than B2Cs ($1bn vs $179m).
The funding for B2Bs continues to outpace that of B2Cs - at 3.4x versus 2x.
- Decentralised finance is the biggest theme to watch out for in the climate fintech sector.
Infrastructures for the tokenisation of carbon are already being constructed.