Sustainability tech has become a focal point for investors and governments, with projections of $75 trillion in funding by 2050 to reach net zero. Yet, venture capital investment in this sector has consistently declined since 2021, primarily due to a mismatch in expectations. Investors often apply metrics intended for faster-growth sectors like SaaS and AI, failing to recognize that many sustainability innovations are still in early stages of market adoption and need time to develop. This has forced many promising startups to bootstrap despite their validated technologies.
According to BCG Henderson Institute, accumulated global investment to achieve net zero is projected to reach $75 trillion by 2050.
Despite the apparent potential, VC investment in sustainability tech has been declining since 2021, revealing significant dissonance in financing expectations.
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