Climate fintechs defy downturn as female founders achieve funding parity

Drawing on data from 750 startups worldwide, the report highlights the subsector’s resilience to economic challenges and its leading position in gender equality in venture funding, with female-founded or led companies achieving funding parity at pre-Series B rounds.

Despite a 26% decline in global climate fintech funding to $1.9bn in 2023, EMEA showed remarkable stability, with only a 2.2% dip-significantly outperforming the broader VC market’s 38% contraction during a period marked by high interest rates and tech sector layoffs.

Female founders achieve funding parity

In a standout trend, female founders are making unprecedented gains in climate fintech. In pre-Series B rounds during 2022-2023, companies with at least one female founder or CEO secured 50.4% of funding across 114 transactions globally, averaging $5m per funding. This stands in stark contrast to the broader fintech sector where female-led companies typically receive just 3.4% of venture funding*. Notably, women have co-founded or lead one third of all climate fintechs, a figure that rises to 45% among companies founded in 2023.

Regulation and technology drive growth

Europe’s advanced climate legislation is driving rapid growth in ESG Data & Analytics solutions, with regulatory reporting emerging as a key capability. Amongst the 106 companies with a regulatory reporting offering, over 90% are ESG data providers, reflecting market demand for integrated solutions as climate-focused requirements become more complex. The report shows that 70% of these integrated reporting solutions are concentrated in the European market, where stringent regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR) create demand for automated solutions.

Companies use data-driven innovations, combining AI, big data, and IoT, to automate ESG assessments and enable real-time environmental monitoring. This shift from historical to real-time data, powered by satellite imaging and geospatial analysis, transforms risk assessment across the sector. Digital Risk Analysis and Insurtech companies lead in adoption, with the subsector gaining major traction - two of the five most-capitalised companies in the dataset have a climate risk or climate data intelligence focus (Planet Labs $574m and ICEEYE $438m).

European leadership meets scale-up bottleneck

While the US still leads on the country level with 141 companies, EMEA retains its regional leadership with 465 companies. The UK-Germany-France triangle forms the core of the European ecosystem, together representing 50% of the companies and accounting for 66.5% of capital raised between 2022 and 2024 (H1). Distinctive trends have emerged:

UK maintains consistent early-stage (pre-Series B) strength, with seed-stage companies securing 36% of global seed funding in 2023. Early-stage companies attracted $180m in 2023, 48% more than their later-stage counterparts.
Germany’s market shows growing investor confidence beyond headline volatility. While two mega-rounds (Enpal $230m, Integrity Next $109m) dominated the 2023 funding, even when removing these outliers, the early-stage funding was up by 11% and the average deal size by 40%
France’s market has been volatile, with funding declining sharply in 2023 after a strong 2022 bolstered by Deepki $167m and Descartes Underwriting $120m rounds. Even excluding major outliers, funding dropped 55% across early and late-stage companies, indicating broader challenges
Europe’s climate fintech sector is building solid foundations but lacks maturity. Only 17 companies across the region have raised above $50m of total capital compared to 23 in the US. Collectively, these US companies have raised $3.9bn—44% more than Europe’s $2.64bn. This disparity is even more pronounced at the individual country level, with US funding exceeding the UK by more than 8x and France by 7x.

Commenting on the findings, Andrea Fritschi, Chief Investment Officer of Tenity said: “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 is scaling these solutions globally. “