Jarek Dmowski shares a funding guide and case studies on climate infrastructure scaleups.
Executive Summary:
Climate infrastructure scaleups require a different funding approach than software-based scaleups, which usually rely on a few rounds of venture capital (VC) funding and an Initial Public Offering (IPO). High capital investments are required after the prototype phase, and a different approach is necessary to leverage opportunities created by a growing pool of climate finance increasingly available globally.
Climate infrastructure scaleups are companies that have moved beyond the startup phase and are now experiencing rapid growth. With proven technologies that meet market demands, they focus on expanding operations and entering new markets. These companies need substantial investment to scale and promote the adoption of their technologies. Their primary goal is to develop systems, facilities, or infrastructure designed to address climate change—whether by reducing its causes (mitigation) or helping communities adapt to its impacts (adaptation).
The global climate finance pool reached ~$1.3T annually, with ~50/50 split between public and private finance. The growth is fueled by the continuous evolution of the international climate finance landscape and the emergence of new solutions for climate infrastructure. Within public finance, development finance, grants and blended finance are gaining increasing importance, while corporate demand, banks, infrastructure funds, pension plans, and catalytic investors are increasingly engaging in scaling climate infrastructure within private finance. To meet global net-zero targets across energy, industry, transportation, buildings, and agriculture, the climate finance pool must grow by 5 to 8 times by 2030.
From research and development (R&D) to early deployment and broad adoption (“innovation to adoption challenge”), climate infrastructure scaleups have a unique opportunity to shape their strategy, business model, partnerships, and roadmaps differently from traditionally VC-funded companies. They will make the most significant impact by successful early deployment of their technologies with an ongoing preparation for the global scaling plan implementation.
New financing options are increasingly available to climate infrastructure scaleups, allowing them to optimize their capital stack and maximize the potential of their target market, product differentiators, and team. “The Capital Stack for Scaling Climate Infrastructure” guide provides a set of solutions for prospective companies and their investors to maximize climate impact.
A summary of the “The Capital Stack for Scaling Climate Infrastructure” is included below, with solutions and case studies explored in the main document.
Key points include:
- Growing and evolving global climate finance
- Innovation to adoption challenge
- Maximizing the potential of R&D grant funding
Read the full article, The Capital Stack for Scaling Climate Infrastructure, on ClimateDrift.com.