# Hardware Startups: Making a Dent in Climate Change
## Introduction
Climate change is one of the most pressing issues of our time, and startups are stepping up to tackle this global challenge. According to a new report published by Congruent Ventures and Silicon Valley Bank, the most promising startups making a dent in climate change are those specializing in hardware and focusing on energy or raw materials. In this article, we will explore the key findings of the report and discuss why hardware startups are essential in addressing climate change.
## The Report: Surveying the Landscape of Climate Tech Startups
The report surveyed over 50 experts from academia, finance, and the private sector to identify the top 50 North American climate tech startups. These startups were categorized into four sectors: agriculture and food, energy, buildings and mobility, and manufacturing and materials. Surprisingly, the majority of the final 50 were manufacturing and materials startups, followed closely by energy startups. However, the agriculture and food sector, responsible for a significant portion of carbon emissions, was underrepresented.
## The Dominance of Hardware Startups
It’s no surprise that hardware startups have taken the lead in the climate tech space. Climate change is a real-world problem that requires tangible solutions. While software can play a role in changing behaviors, it is limited in its ability to address the root causes of climate change. Hardware startups, on the other hand, have the potential to revolutionize industries by developing technologies that reduce reliance on fossil fuels and promote sustainable practices.
## The Age and Funding of Climate Tech Startups
The average climate tech startup in the report is 7 years old and has raised an impressive $374 million in funding. However, this figure is skewed by a few well-funded startups. The median company, which provides a more accurate representation, is 6 years old and has raised $114 million. These numbers highlight the challenges that climate tech startups face in securing substantial funding, especially during the early stages of development. The “commercialization valley of death” is a significant hurdle, where the cost of scaling up the technology often exceeds the risk appetite of many investors.
## The Time and Effort Required
Climate tech startups require a significant investment of time and effort. They must prove the scientific basis of their technologies, which can take years. Additionally, hardware development and refinement are time-consuming processes. Unlike software startups that can scale quickly, climate tech startups often take longer to mature. However, their impact can be far-reaching and have the potential to transform entire industries.
## The Potential Upside for Investors
Investing in climate tech startups may seem like a risky proposition for those unfamiliar with the sector. Hardware startups often require substantial investment and face unique challenges. However, the potential upside is significant. The market for climate tech is already valued at $1 trillion and is projected to double every decade. As the urgency to combat climate change grows, companies that can effectively reduce emissions have the opportunity to capture a significant portion of this market. Investors who support these startups early on stand to benefit from their success.
## Conclusion
In conclusion, hardware startups specializing in energy or raw materials have emerged as the frontrunners in the fight against climate change. The Congruent Ventures and Silicon Valley Bank report highlights the importance of investing in hardware solutions to address the real-world challenges posed by climate change. While hardware startups may face unique obstacles, their potential to make a meaningful impact and drive sustainable change cannot be understated. As the market for climate tech continues to grow, investors have the opportunity to support innovative startups and be part of the solution to one of humanity’s greatest challenges.