There's never been a better time to build in climate
Climate tech now accounts for more than a quarter (!) of every venture dollar invested – a figure that would have been unthinkable a decade ago during the depths of clean tech winter.
This rapid re-allocation of private investment dollars into climate solutions comes from an unprecedented number of climate-focused funds (totaling $94B of new AUM raised since January 2021) and an influx of new investors (4,000+ firms participated in at least one climate deal in 2022).
This shift in capital has driven a step change in talent entering the field. And now it seems like the most common hesitations for going full time on climate are finally out of date: there’s no longer any need to take a pay cut or have a PhD to build a climate business.
The Wireframe team has invested across multiple market cycles ever since the 2000’s clean tech boom. While there has since been a lot of attention on its failures, we also saw many great businesses like Enphase, Tesla, and Sunrun that would go on to generate massive returns. And now in 2021 alone, more startups have hit $1B+ in market cap than in the previous 6 years combined.
As this generation matures, there are thousands of lucrative new career opportunities opening up for builders with different risk appetites. The chance to create climate impact and realize meaningful financial upside are no longer mutually exclusive.
Another critical difference from clean tech 1.0 is the maturity of enabling technologies. For many climate-relevant industries – like power generation and transportation – solutions that were experimental are now proven and ready to scale. This creates a new set of challenges around coordination, deployment, financing, and monitoring – all of which are better suited to software solutions.
Even among established hardware and deep tech companies there is an increasing need for folks with experience scaling fast-growing tech companies to help bring new products to market. In fact, Terra.do – a leading platform for education and job opportunities with climate tech startups – estimates that 60%+ of their 17,000 posted jobs are for non-science roles, including ~1200 for software engineers.
However, the scope of the challenge can make it difficult to know where to start.While some sectors are relatively mature – creating dozens of valuable startups – others, like heavy industry or climate resilience, are still emerging. Today, climate tech unicorns are concentrated in energy (36%), transportation (26%) and food & agriculture (23%).
With so much opportunity across industries, we asked leaders at climate tech companies for their perspective on how they identified the right opportunities for them. The most common advice we heard was to ensure that the company was ready to take advantage of their functional expertise.
For some, like Shannon Smith – Chief Growth Officer at Dandelion Energy – her time leading sales and marketing for established consumer brands like Williams-Sonoma, and J. Crew felt like a natural jumping off point into a consumer-focused climate company. Making residential geothermal heating and cooling accessible to modern homeowners might be a more complex acquisition and fulfillment process, but at the end of the day, the buyers are the same.
For Sam Swift – VP of Data Science at Sealed – it’s not only important to clearly understand how his data science background fits the company’s stage and mandate, but also why a company is positioned to win. He describes his process when evaluating new opportunities :
“I ask myself two questions about any potential role, but especially in climate and other pro-social areas where we want to believe everything is great:
Can I explain why this company's business model makes sense and is a solution to a problem I care about?
Can I explain why my role in that company would be central and high leverage?”
One approach to getting up to speed on new sectors and climate solutions is to start advising first. That’s how Jonathan Strauss – co-founder of Climate Draft – got started. After spending his career in product management and marketing for social media and political tech companies like Yahoo and Swing Left, he started advising early-stage climate organizations. He went on to launch Climate Draft to make it easier for top talent from the tech industry to 1) recognize that climate tech is a lucrative career path, and 2) connect with opportunities to get involved immediately – whether as an advisor, angel investor or in a full-time role.
For some, joining a growth-stage startup might be the right onramp to climate – an opportunity to learn more about the incentives and dynamics of a new industry without the expectation that every team member needs to be a climate science expert. Leveraging climate VCs to identify companies that fit your goals can be a great place to start. The climate community is highly collaborative, and most experienced operators and investors are authentically excited to connect great talent to open roles – whether they have an active interest in the company or not. Climate Draft hosts a job board for hundreds of venture-backed climate tech companies, including many openings in Wireframe’s portfolio.
If you’re looking to join or launch an early-stage stage startup, the consistent advice we heard on coming up the learning curve is that by taking advantage of the work that people have already done to map and model climate solutions, folks can shortcut years of work or school in a climate-relevant field. And luckily there is a fast-growing set of resources and communities – networks like Climate Draft, Terra.Do, Climate Vine and Climatebase – emerging to help people navigate this opportunity set.
At Wireframe, we view insight into a market as necessary but not sufficient to building a transformational climate company. And often, experience launching and scaling a successful startup is just as rare of a skillset as a degree in material science or a decade of experience developing solar projects at a utility. We believe there's never been a better time to build a great team working on climate. If you’re a veteran from traditional tech ready to transition your skills and energy into climate – either by joining an existing company or starting your own – we'd love to help.