Investing in Climate Innovation is Future Proof

Earth needs 5 times more investment into climate change than the status quo to alleviate the worst effects (in USD): : 

Neither governments nor venture capital (annually total investment of $250-500b) is not enough. We need more money and it is a good investment as we can see in the following chart. The cost of not achieving the needed funding is 9 times higher.

It is also the right time to invest more in climate innovation:

“Global momentum is building to achieve net zero in greenhouse gas (GHG) emissions—and to do so more quickly than previously envisioned. Getting there will require unprecedented levels of innovation. While a fast-rising number of companies and governments are committing themselves to ambitious net-zero goals, most focus the strategy exclusively on emissions and expect the necessary technologies and solutions to become available as needed.”

BCG, Next Generation of Climate Innovation

It is good business to invest in climate innovation. 

There is a case to be made that green investment will outperform other industries: 

If we follow BCG, in that particular case we do, everything will be about ecosystems. 

We believe that this pie-chart is not complete without a broad range of the public to understand, finance, follow and carry the innovation ecosystem. This is an added value Marabou wants to bring into that ecosystem. 

But there is currently no reason to celebrate. The funding drought in the past months has not spared climate innovation: 

Many reports including one from PWC conclude that there is  TOO LITTLE INVESTMENT in climate innovation. This includes a funding gap in climate emission innovation funding. 

To us it is obvious that we as a global society need to take more risks in funding innovation. We have to fund earlier, faster and more. 

This is a call for Marabou. Our target group doesn’t operate with the typical VC constraints, they know no IRR, no discount rate, they don’t factor inflation in their dealings with money. They invest out of their purpose first and for monetary gains second. This allows us to take bigger risks and invest earlier. 

Climate funding is by great majority an undertaking by the United States: 

While we will certainly not ignore North America, we will also focus on regions that have a gap and that are still untapped. 

Most climate investment focuses on energy and mobility. Marabou will take a stronger look into less invested industries such as food, agrotech and financial services. 

The climate investment landscape is getting more risk-averse in recent years. Early stage ventures have been dropping off versus mid- and late stage investments. Marabou will work anti cyclical and work strongly in the early stage.

To quote PWC: 

“The investors we spoke with cited two main reasons for the relative decrease in early-stage deals. One is investor judgment. ‘We see too many things that are interesting and have a lot of potential,’ said Extantia’s Reem, ‘but they are not investable.’ Robert Schultz, a partner at Capricorn Investment Group, agreed: ‘Sometimes we’ll say, “This technology is unbelievable, but it’s going to be hard for us to invest in it because they won’t be able to scale it.”’

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