Women secure 50% of funding in Climate FinTech, defying tech downturn

By Gloria Methri

The climate FinTech sector is showing resilience amid a global tech downturn, according to the latest Climate Fintech Report by Tenity. The report, drawing on data from 750 startups worldwide, highlights a standout achievement: female founders in the sector have reached funding parity at pre-Series B stages, securing 50.4% of venture funding.

During 2022–2023, start-ups with at least one female founder or CEO achieved unprecedented funding equality in the climate FinTech space, averaging $5 million per transaction across 114 deals.

This milestone stands in stark contrast to the broader FinTech industry, where women-led companies typically receive just 3.4% of venture funding. Women co-founded or led one-third of climate FinTechs globally, a figure that surged to 45% among companies founded in 2023.

Despite a 26% global decline in climate FinTech funding, falling to $1.9 billion in 2023, the sector outperformed the broader tech market, which contracted by 38% due to high interest rates and mass layoffs. Europe, the Middle East, and Africa (EMEA) displayed remarkable stability, with a modest 2.2% drop in funding.

Europe’s Regulatory Landscape Spurs Growth

Europe’s stringent climate regulations, including the EU’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR), are driving demand for integrated ESG Data & Analytics solutions. Among 106 climate FinTechs offering regulatory reporting capabilities, over 90% specialise in ESG data solutions.

The use of cutting-edge technologies like AI, IoT, and geospatial analysis is revolutionising real-time environmental monitoring and climate risk assessment. This innovation is spearheaded by Digital Risk Analysis and Insurtech companies, two of which—Planet Labs ($574 million) and ICEYE ($438 million)—rank among the top five most-capitalised firms in the dataset.

Europe’s Growth Faces Scaling Challenges

While Europe boasts 465 climate FinTech startups—more than three times the US total—its companies lag in securing late-stage funding. Only 17 European startups have raised over $50 million, compared to 23 in the US, where these firms collectively amassed $3.9 billion, 44% more than Europe’s $2.64 billion.

Within Europe, the UK, Germany, and France dominate the landscape, accounting for half of all startups and 66.5% of capital raised between 2022 and mid-2024. Key trends include:

• UK: Seed-stage startups secured 36% of global funding in 2023, with early-stage funding up 48% compared to later rounds.
• Germany: Investor confidence is rising despite headline volatility; average deal sizes grew by 40%.
• France: A volatile market saw funding plunge 55% in 2023, even excluding outliers.

Andrea Fritschi, Tenity’s Chief Investment Officer, emphasised the sector’s potential, saying, “Climate FinTech is not just showing resilience—it’s redefining inclusion in venture funding. From blockchain accountability in carbon markets to AI-powered risk assessments, the sector exemplifies innovation. Europe leads in diversity and early-stage growth, but scaling globally to match US capabilities is the next big challenge.”