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February 29, 2024

Unlocking Sustainable Solutions: Insights from Cleantech Forum North America

HG Ventures’ Nick Arnold recently attended the Cleantech Forum North America, which brings together leaders in the sustainable innovation ecosystem – start-ups, scale-ups, investors, corporates, government and more. Here, Nick shares his observations and insights from the three-day event.

Nick Arnold, Principal, HG Ventures

Investments in cleantech show no signs of slowing down in the way that some other sectors have. Fueled by the 2022 Inflation Reduction Act, which made the single largest investment in climate and energy in American history, the cleantech sector attracted more than $200B of investment in 2022/23, a 37% increase on the previous 12 months.

It was against this backdrop that delegates gathered in San Diego for the Cleantech Forum North America, recently. While investments in this space need to increase further if the U.S. is to meet its aim of limiting global temperature increases, there is still much reason to be bullish.

Sustainable Aviation Fuels Take Off

In the realm of sustainable aviation fuel, the tide is turning towards electrofuel applications as a beacon of hope for a greener future. With multiple technical pathways reaching maturity in the e-fuel space, the viability and sustainability of such solutions are becoming a tangible reality.

We recently invested in INERATEC, a pioneering e-fuel company, and expect to see many more opportunities emerging as this technology matures.

Eliminating Supply Chain Bottlenecks

The challenges caused by bottlenecks within complex supply chains, and the pressing need to dismantle them, emerged as a key theme over the course of the conference.

As the world grows increasingly interconnected, the resilience of global supply chains becomes paramount, and it is encouraging to see the convergence of innovation, government incentives, and venture capital helping to establish North America as a trailblazer in localizing these supply chains, simplifying them and removing the bottlenecks that are barriers to progress.

An Evolving Venture Capital Landscape

Notwithstanding the high levels of investment in the cleantech sector, it remains the case that the landscape of venture capital funding is undergoing a profound transformation. Tightened funding and terms that favor the investor have become the norm. Despite this shift, however, many promising companies continue to secure funding, underscoring the resilience of innovation and the enduring allure of ventures that hold the promise of both profitability and sustainability.

Recognition for HG Ventures Investments

The 2024 Global Cleantech 100, announced at the Forum, recognizes the leaders in the field of cleantech, and it was a proud moment to see three of HG Ventures’ portfolio companies included in this list.

INERATEC, in whose Series B funding round we recently invested, is a pioneer in e-fuels, while  Circulor provides a leading solution to industrial, complex supply chain traceability, based on AI and Blockchain technology; exactly the type of solution required to solve those supply chain challenges. Finally, 6K operates in the advanced materials space and is transforming legacy industrial processes with high efficiency plasma technology. These companies’ inclusion is a testament to their ingenuity, and we are proud to back them.

I left the Forum with great optimism, and the sense that productive dialogue delegates shared there will continue.