How do climate tech startups get funded in Australia?

“Yeah, or it seems, I guess, that maybe startups in the climate tech space can get funding in the early days. Um, they can get like pre-seed funding, but when it comes to that follow-on funding they're struggling to get that money. And maybe that speaks to kind of some of the barriers that these companies are facing. There's quite a few unique barriers, I think, that climate tech companies face that maybe the average B2B SaaS company doesn't face when it comes to kind of the regulatory barriers.”

“Yeah, it's awesome. So stay tuned for the chat with Chris later. We can kind of go behind the scenes a little bit on that report. And then I guess there was also some news around climate tech funding that kind of came out around the same time as the report, which was kind of interesting. So the team at Climate Salad, which is a fantastic organization that brings together climate tech, clean tech founders and startups from around Australia, they had a piece in the AFR talking about the need for more support for climate tech companies. Particularly for the kind of over the coming year. And they said that, you know, I guess amongst their membership, which is about 600 startups, there's about 100 in there that saying, are saying based on their regular survey that they send out that they need funding to survive the rest of this year. And that funding amounts to about $100 million. So that was really interesting to see, but that kind of all also kind of came up at the same time as the Cutthroat Venture Report. And the Cutthroat Venture Report had some, what most people would see as quite optimistic data around climate tech. Yeah.”

“It's that early stage funding. You know, I deal with lots of startups at the early stage, and I don't think it's about government funding, they don't, it's not government funding that they need. It is, they really need to just get $50,000, that's all they need. Some of them really just need that start and the big gap is no one wants to invest in you till you've got some traction, basically. So how do you get that traction with no money? It's hard. So that's the biggest gap. It is ultimately, you can't get an investor on board here in Australia until you have traction, you've got customers. Until you've really proven yourself. And how do you get there without money? And that's where a lot of them actually fail. And I remember years back, we had this amazing innovation that would, this is back in 2010, a vine pruning AI kind of machine. I had phone calls from all over the world as soon as they heard about this team, and no one would actually invest in them. No one would put any money in them until they could prove that this thing could work. And the only way they could get it to work was under, in really controlled conditions and at nighttime under lights because daytime would actually affect the actual movement of the robot. So, you know, this was an amazing South Australian innovation that was never going to take off because they couldn't get that early-stage funding. But, you know, everyone, everyone all over the world was ringing saying, we want this, if you can make it work, we want it. So, you know, that's just an example of an innovation that was just actually just kind of left up to sit because we couldn't get that early stage investment.”