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Driving Change

Why 'climate tech' is the new cleantech

Will the term crash and burn or will it find successes and help make real progress with the climate crisis?

This article is adapted from GreenBiz's weekly newsletter, Transport Weekly, running Tuesdays. Subscribe here

I have the sad claim to fame of being one of the journalists most associated with the bubble and bust of Silicon Valley's tortured love affair with cleantech. It perhaps wasn't the most advantageous career move, but it was an interesting ride to follow, and I'm betting the ride ain't over yet.

A decade and a half after the first wave of cleantech kicked off, Elon Musk has clawed his way through the valley of death, but the vast, vast majority of startups and investors did not and entire investing sectors (CIGS solar cells, solar thermal, cellulosic biofuels) were entirely wiped out between 2006 and 2014. 

With this background, I've long wondered, if/when cleantech comes back into vogue in Silicon Valley, what will it look like? The underlying trends — a world of constrained resources for 9 billion people by 2050 — continue to chug along, as solar panels and wind turbines grow, and electric vehicles begin to make a dent. So, will we dust off the term cleantech and try again or will it look like something else?

Well, after talking to startups and investors alike who consider themselves part of the Silicon Valley innovation ecosystem, it's beginning to sound like "climate tech" is gaining some real traction. There are a variety of other terms, including the more general "sustainability" or "low carbon" tech, but a growing group of investors and entrepreneurs are classifying their companies or some of their portfolios as climate tech. 

Similar to cleantech, climate tech is a sufficiently broad enough term to incorporate a large amount of technologies and industries, but it also encapsulates the growing sense of urgency and youth movement around the "climate crisis."

Climate tech is a broad enough term to incorporate a large amount of technologies and industries. It also encapsulates the growing sense of urgency and youth movement around the 'climate crisis.'
Last month, Sequoia Capital, one of Silicon Valley's longest-running and most premier VC brands, did a shout-out for climate tech entrepreneurs. Tech journalists who focus on Silicon Valley have started noting the new climate tech investing class, and big-name tech journalists such as Recode founder and New York Times contributor Kara Swisher have brought renewed attention to tech's lack of attention to climate change. Old school industry watchers and greentech journalists, too, have started to point to the growing use of the term. I am not alone in making this pronouncement.

Why does what we call it matter? In some ways, it matters a lot.

Venture capitalists are particularly keen to classify investments to communicate to their limited partners (which give them money) that they're investing in hot areas that will make their LPs money. That's why cleantech became such a dirty word in the first place: because it lost LPs money and made future fundraising difficult. VCs also tend to watch what other firms are doing closely to make sure they're staying ahead of the curve and competing effectively with peers.

For startups and entrepreneurs, putting the right term on their company can unlock potential dollars, which is particularly important for companies with tech that might not be so sexy — a membrane, an engine tech, supply chain software; you get the picture.

But in some ways, coining the right term really doesn't matter at all. Startups and companies in general gain traction because they figure out how to create value for their customers, whether those customers are utilities, automakers, consumers, big corporates, farmers, grocery store owners, etc. 

Take a company such as Generate Capital, which over the past six years has helped finance, develop and operate projects such as community solar farms, battery storage for buildings, electric bus fleets and water cleaning plants. These are projects that weren't yet on the radar of banks but are generating a lot of value (and savings) for the customers that use them — at the same time they help fight climate change. 

Generate, by the way, just raised $1 billion in funding to continue to scale these types of projects and is one of the most successful cleantech firms out there. "Climate tech" fits it perfectly, but they don't necessarily need to use it in branding. Its customers just know that sustainable infrastructure makes sense and saves them money.

Developing a popular term for an investment class also can be counter-productive for some because it can create a lot of hype, which in turn can bring in more "dumb money." But really, we do need all hands on deck for the climate crisis, so I for one welcome all kinds of money into the space. 

If you remember back in 2008, over $4 billion was invested by VCs into cleantech for that year, the peak of the bubble. In reality, we need a lot more than that for both already-established climate tech and the next generation of R&D. Generate alone just raised a quarter of that peak bubble amount, while YouTube generated around that amount in ad revenue just for the fourth quarter. 

What do you think? Will the term climate tech, like cleantech, crash and burn again or will it find successes and help make real progress with the climate crisis? Send me your thoughts at

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