Amidst economic turbulence, investment in climate-related financial technology firms soared to $2.3 billion across the US and Europe in the past year, defying broader fintech trends, as revealed by the latest insights from CommerzVentures.
Released today, CommerzVentures' Climate FinTech Report 2024 examines the investment landscape, tracking funding flows into over 600 fintech startups engaged in sectors such as carbon markets, energy management, ESG reporting, and more.
Despite a challenging economic climate marked by a 38 percent drop in overall fintech funding, climate fintech exhibited resilience, experiencing only a 19 percent decline compared to record highs in 2022.
European climate fintechs, in particular, outshone their US counterparts, securing 1.5 times more VC funding across 3.3 times more funding rounds, with Germany emerging as the top investment hub, surpassing the UK.
Carbon markets and energy management emerged as hotspots, attracting substantial investments of $729 million and $530 million, respectively. Carbon accounting fintechs also garnered significant attention, with $333 million in funding.
The report underscores the sector's maturation, with a growing emphasis on scaling up operations. This is reflected in the increasing proportion of investment directed towards Series B funding rounds, signalling the evolution of climate fintech from an emerging sector to a robust market force.