Green Startups Face Pressure to Make Climate Advances

The green startups won the lottery last year. Since then, investors have become cautious, putting more pressure on cash-rich companies to provide better batteries, more sustainable materials, and light electric vehicles.

According to PitchBook, about 1,200 privately held green startups raised a record $45 billion last year. This is about twice the total of the previous year. Sustainable companies have achieved similar results with initial public offerings, providing a treasure trove of $90 billion in the war for a once-capitalized industry.

The size of the new cash can prevent the same bankruptcy that ended the previous green investment boom. The bankruptcy of solar startup Solyndra LLC and battery upstart A123 Systems Inc. in the early 2010s caused years of funding shortages.

The money was a game-changer for many businesses. Battery maker Freyr Battery SA has raised about $700, after having its $30 million since its founding in 2018. Another battery company, Northvolt AB, raised $2.75 billion in one round of funding last year. Electric vehicle maker Rivian Automotive Inc. has raised about $ 14 billion in its largest US IPO since 2014.

Energy Vault is one of many companies trying to store renewable energy to provide power when the sun does not shine and the wind does not blow. The company uses surplus renewable energy to raise 30-metric-ton blocks of elevator shafts and lower them when needed for power generation.

According to an analysis, about 40 sustainability companies completed the SPAC merger in 2021 and led by electric vehicle startup Lucid Group Inc. to raise about $25 billion in cash. Many SPAC transactions announced in late 2021 are expected to close soon and raise billions of dollars. Last year, 27 green companies published regular IPOs, raising more than $20 billion, a journal analysis of Dealogic data shows.