‘Recession-resilient’ climate startups shine in tech downturn
SAN FRANCISCO — When Arebeth Pease was laid off from the tech startup MasterClass last year, she could have had her pick of jobs. But so many tech compa- nies’ missions rang hollow, she said, and many were creating more problems than they were fixing.
Pease, 42, was drawn instead to Span, a startup that makes smart home elec- trical panels and is among a class of fast-growing com- panies aiming to combat climate change. She joined Span in September as an operations manager, with the startup’s focus on slowing the effects of climate change as the main selling point.
“We’re actually doing work that matters,” she said.
As tech companies slash perks and cut jobs, the downturn has spurred a wake-up call among many workers, causing them to question whether their company’s role in society — selling ads or selling stuff, often — was actually making the world a better place. The result? More are now flocking to climate startups, just as investors pour money into the field.
Last year, climate startups in the United States raised nearly $20 billion, topping 2021’s high of $18 billion and nearly tripling 2020’s $7 billion, according to Crunchbase, a data provider. At least 83 climate-focused companies around the
world are worth more than $1 billion, according to Holo- nIQ, a research firm.
Despite worries of a recession, enthusiasm about climate startups is undimmed.
Laurence D. Fink, CEO of the investment firm BlackRock, recently declared that 1,000 more $1 billion so-called cli- mate unicorns were on the way.
“There is no line of business that will not be impacted by climate,” said Chris Sacca, one of the founders of Lowercarbon Capital, a climate-focused venture capital firm, at a conference run by Axios in October. “That’s also the opportunity.”
The momentum a nd excitement, invest o rs said, are d iffere nt from the cleantech boom of the mid-2000s, when investors poured money into a cohort of clean energy companies that were reliant on government subsidies. Many of those startups eventually went under.
“There were a lot of lessons learned from the first cleantech wave,” said Ben Marcus, an investor at the venture capital firm UP.Partners. “Investors are not just looking to invest in science projects but in real companies.”
Now broader economic trends have coalesced to bolster the market. The cost of renewable energy has fallen over the past decade. The Securities and Exchange Commission last year proposed a rule that would require companies to report their emissions, creating demand for tools to measure them. The Inflation Reduction Act, passed last year, dedicated $370 billion to climate-related spending.