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Sustainability Funding Sees Only Modest Decline As Urgency Trumps Frugality

Illustration of Magic 8 Ball as earth with Outlook Not So Good fortune

Catastrophic climate change projections are only getting more pronounced. And across the globe, overall startup investment is on the decline.

These two trajectories don’t fundamentally have anything to do with each other. The planet doesn’t check startup funding data before deciding how many record heat waves and hurricanes to unleash. And the venture pullback, a comedown from a cyclical bubble, has nothing to do with climate dynamics.

Nonetheless, the chronological overlap of these otherwise unrelated phenomena may help explain why sustainability-focused startup investment has declined this year, but less sharply than in most other sectors. Urgency is higher, but investors’ willingness to spend remains constrained.

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The end result? So far in 2023, investors have put just over $17 billion into global seed- through growth-stage financings for sustainability-focused companies, per an analysis of Crunchbase data. That’s on track to come in pretty close to 2021 totals but likely below the record-setting investment tallies of 2022.

For a sense of how investment has unfolded over time, below we chart out annual funding from 2018 till today:

We also tallied U.S. sustainability-focused investment, which follows a similar pattern. Funding for 2023, so far, is on track to come in below the prior peak years:

Active investors

Funding data shows that while the largest global venture investors have pulled back considerably this year, many climate-focused investors remained pretty active. In the U.S. tallies, a handful of investors stood out as particularly busy.

One standout is Lowercarbon Capital. The climate-focused venture firm invested in 12 sustainability-related rounds so far this year, mostly at seed and early stage. The companies it backed collectively raised over $367 million so far in 2023, Crunchbase data shows.

Another major player is Breakthrough Energy Ventures, the greentech fund backed by Bill Gates and Jeff Bezos, which joined 11 U.S. rounds this year. This includes last week’s $195 million financing for KoBold Metals, a developer of technology for finding deposits of metals, including rare substances used in EV batteries.

Among up-and-comers, there’s Fifth Wall, a venture firm known for real estate investment that has increasingly taken a role in sustainability-related investments. Per Crunchbase data, five of its 2023 U.S. investments have a sustainability focus, including a $300 million Series B for Our Next Energy, a developer of energy storage for electric vehicles and the grid.

Popular sectors

Across sectors, meanwhile, a few areas stood out as especially attractive among investors. We look at three: solar, waste and wastewater management, and battery tech.


We’ll start with solar, an area where we see a lot of growth-stage activity. Per Crunchbase data, about $6 billion went into solar-related financings 1 this year, across 79 rounds.

Much of the money went toward private equity investments in building out solar power infrastructure. Notable deals include:

  • Silicon Ranch, a 12-year-old, Nashville, Tennessee-based company that develops and operates utility scale solar facilities pulled in $375 million in a January financing.
  • PowerField Netherlands picked up $550 million in February to develop solar parks, solar-powered charging stations and energy storage systems.
  • Amarenco, of Ireland and France, develops large solar installations and landed $330 million in March.

Recycling, waste management and water treatment

We also saw a fair bit of investment around recycling, waste management and water treatment. Collectively, companies in these categories attracted around $1.1 billion globally in 2023, across 99 rounds.

Some of the larger, standout rounds in this subset include:

  • APK, a German startup developing recycling technology for plastic waste, snapped up $140 million in a financing backed by Kirkbi A/S, the family-owned holding and investment company of the LEGO brand.
  • Mill, a San Bruno, California, startup selling a “food-shrinking, de-stinking” kitchen bin and food waste pick-up service, reportedly raised more than $100 million from backers including Breakthrough Energy Ventures and Energy Impact Partners.

Batteries and energy storage

Battery technology 2 startups also continue to attract significant capital. Per Crunchbase data, over $3.4 billion in venture and growth-stage investment went to battery-related companies globally in 2023. Of these, most had a sustainability angle, such as developing battery tech for EVs or improved storage for energy generated from renewable sources.

  • Northvolt, a startup whose self-described mission is to deliver batteries with an 80% lower carbon footprint compared to those made using coal energy, picked up $400 million in June, bringing total equity funding to over $5 billion.
  • Elevate Renewable Energy, a Boston startup looking to build out battery energy storage at large generation facilities, landed $150 million in a January financing.

Neither heartening nor dismal

No sane person expects startups and their backers to single-handedly mitigate the catastrophic effects of climate change and environmental degradation. But it is reasonable to hope for some major contributions from venture-backed entrepreneurs.

Are they as committed as ever to delivering? Looking at the aggregate numbers for sustainability-focused funding, it looks like climate-focused investors remain on track with their mission. And while most generalist funds have pulled back on overall investment, they’re at least still doing sustainability-focused deals. If the market rebounds, we can hope they’ll further up their game.


Funding totals are based on the Crunchbase sustainability industry category, with the following Crunchbase Pro query used to generate funding numbers:

We included both venture and private equity financings in the totals, as many private equity firm investments in the sustainability space can be characterized as growth financings. However, we limited the query to companies founded in the past 20 years to narrow the results to startups and growth companies.

Illustration: Dom Guzman

  1. Total includes both solar-focused companies and companies for which solar is one of multiple industries they’re targeting.

  2. Battery technology investment totals included some companies whose funding rounds were not included in the broader sustainability category.

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

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