Catalytic investors sharpen their tools to accelerate commercialization of climate solutions

By Amy Cortese and David Bank

The stubborn gap in financing for early-stage innovations for years was an obstacle to the development of breakthrough climate solutions.

To bridge that early-stage gap, pioneering and catalytic investors supplied patient and risk-tolerant capital, public-private partnerships leveraged university research and government grants, and entrepreneurial accelerators provided training, coaching and other support. 

Lo and behold, venture capitalists and other commercial investors swarmed to climate opportunities, pouring nearly $40 billion in financing into climate-related startups last year.

Now, the climate financing gap has moved downstream, as all those startups with early-stage innovations seek to commercialize their solutions. The movement of promising technologies, first into demonstration projects and then into large-scale production, remains far too slow for the rapid scale-up needed to meet the climate emergency.

To bridge these new gaps, new streams of catalytic capital and new models are emerging to de-risk “first of a kind” and other early projects, guarantee that there are buyers for critical climate solutions and otherwise mitigate risks and incentivize progress.

“Scaling early-stage solutions to widespread commercial adoption has historically taken decades (e.g., solar photovoltaics), but our planet no longer has time to wait,” Prime Coalition’s Sarah Kearney and Karine Khatcherian write in a guest post on ImpactAlpha. “We need to find our way to decarbonization faster than ever, and with solutions at all stages of technological development.”

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