In its latest Climate FinTech Report, Tenity has unveiled compelling insights into the subsector’s resilience and growth dynamics.
According to FinTech Finance, despite a 26% drop in global funding to $1.9bn this year, Climate FinTech in the EMEA region demonstrated remarkable stability, with a minor 2.2% decrease, outshining the broader VC market’s 38% downturn amidst rising interest rates and layoffs across the tech industry.
A notable highlight of the report is the breakthrough in gender equality in venture funding. For the period 2022-2023, female founders or CEOs at the helm of Climate FinTech startups have achieved funding parity in pre-Series B rounds. These companies garnered 50.4% of the funding from 114 transactions worldwide, with an average of $5m per funding. This is in sharp contrast to the broader FinTech sector, where female-led companies receive only about 3.4% of venture funding. Women have co-founded or lead one-third of all Climate FinTechs, a percentage that increases to 45% among companies founded this year.
The report also sheds light on the significant role of advanced climate legislation in Europe, which is propelling rapid growth in ESG Data & Analytics solutions. More than 90% of the 106 companies offering regulatory reporting are ESG data providers, driven by the increasing complexity of climate-focused regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR).
In terms of technology, companies are leveraging AI, big data, and IoT to enable real-time environmental monitoring and transform risk assessments. Digital Risk Analysis and InsurTech companies are at the forefront of adopting these data-driven innovations. Remarkably, two of the five most-capitalised companies in the dataset, Planet Labs and ICEEYE, are focused on climate risk and climate data intelligence, securing $574m and $438m respectively.
The UK, Germany, and France form the core of the European ecosystem, together accounting for 66.5% of the capital raised in the region from 2022 to mid-2024. However, while the US still leads with 141 companies, the 465 companies in the EMEA region maintain regional leadership. The disparity in scale and maturity between the US and Europe is evident, as the US companies collectively raised $3.9bn, significantly surpassing Europe’s $2.64bn.
Andrea Fritschi, Chief Investment Officer of Tenity, commented on the findings, stating, “Climate FinTech is not just showing remarkable resilience – it’s setting new standards for inclusion in venture funding. With blockchain technology applied to ensure accountability in carbon markets and AI tapped for real-time climate risk assessment, the sector proves that innovation and gender equality can go hand-in-hand. While Europe leads in diversity and early-stage innovation, the challenge now is matching US capabilities in scaling these solutions globally.”
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