While the broader fintech sector typically gives female-led companies just 3.4% of VC funding, climate fintech tells a different story. Women now co-found or lead one-third of all climate fintech ventures, a number that jumps to 45% for companies launched in 2023.
The 2024 Anthemis Group analysis shows that the EU’s climate fintech sector raised $3.2 billion across 286 companies, with Germany leading at $1.04 billion, followed by France, Finland, the Netherlands, and Sweden. But what really matters is how women drive this change – female founders have achieved a 50.4% funding parity at the pre-Series B stage, with 33.92% of funded companies led by women.
TFN spoke to some of the female founders across Europe. Here’s what they told us about their journeys, challenges, and successes in the climate fintech sector.
Climate fintech landscape: a shift from standalone solutions to integrated platforms
The first half of 2024 showcases the promising potential of the European climate fintech ecosystem. Despite a 6.87% decrease in total funding to $369.64 million, the sector demonstrates resilience. With an average ticket price of $14.17 million, this shift signifies a market recovery and continued interest in climate-related financial technologies despite broader economic challenges affecting VC markets.
The early-stage financing of climate fintech startups reached $174.99 million in the first six months of 2024, with an average round of $8.33 million — a 71.71% increase compared to funding in 2022 and 2023. At the same time, the late-stage funding of climate fintech startups hit $194.65 million — a 33.96% decrease compared to the same period.
This year, climate fintech companies are leaning toward a digital-first approach, leveraging digital platforms to minimise their carbon footprint and align their business models with sustainability goals. Andrea Fritschi, Managing Partner and Chief Investment Officer at Tenity, told TFN: “There’s a shift from standalone solutions to integrated platforms combining multiple services (ESG analytics or risk assessment in tandem with regulatory compliance) — reflecting growing market sophistication and demand for more comprehensive solutions.”
Furthermore, traditional financial institutions are finally awakening to the imperative of sustainability. “Banks are now more open to discussing their green initiatives and portfolios, which was not the case 10 years ago. There is a lot of competition in the banking industry now, with many new digital banks focused on providing a great customer experience through mobile banking platforms,” explained Monika Martinsson, CTO & co-founder of Deedster, a gamified environmental education platform that landed SEK 15M from Wellstreet, bringing the total funding to $3M.
Technological automation is also becoming the sector’s backbone. AI, satellites, and IoT technologies transform how we process and analyse environmental data. Innovation is happening at lightning speed, from automated regulatory reporting to parametric insurance products using live weather data. Puja Mahajan, CEO & Founder of Azzera, sustainability software for aviation that has secured $1M in total funding so far, commented: “The climate fintech space is a new and growing sector, with an increasing focus on data-driven approaches and leveraging AI/ML to improve carbon emissions calculations and accounting.”
Eleanor Willi, CEO & Co-Founder at rezonanz, a Swiss software company that raised CHF50.0k from Tenity in March 2024, offered a slightly different perspective: “There is strong support for what climate fintech companies are doing, but it can sometimes be overshadowed by ‘noisier topics’ like AI or crypto. The role of climate fintech will only grow as a policy vacuum and climate problems become more prevalent, with increased pressure on the private sector to take action.”
Funding parity is reached for female-led startups in climate fintech – but what are the factors behind them?
Andrea Fritschi identifies five critical drivers: ESG focus, regulatory innovation, sector resilience, mission-driven entrepreneurship, and a supportive ecosystem. At the core is a fundamental shift in how we understand value creation. “AI algorithms can now process vast amounts of environmental, social, and governance data, providing nuanced insights that go far beyond traditional financial metrics,” Fritschi explained.
European climate legislation has been a catalyst, creating unprecedented opportunities for innovative startups. Monika Martinsson shared: “Climate challenges engage women differently. We’re seeing more women founding companies in sustainability because these problems demand holistic, collaborative solutions—and women excel at that approach.”
Despite a 26% decline in global climate fintech funding in 2023, the sector outperformed the broader VC market, which contracted by 38%. This resilience created more opportunities for diverse founders. Brianna Bao, COO of CoAI, explained the reasoning: “This trend can be due to a shift in investment strategies, where funds focus more on supporting their existing portfolio companies and investing in later stages like M&A or PE, rather than early-stage investments.”
Bao continued: “At the pre-Series B stage, the investment criteria becomes more rigid, focused on metrics like revenue and growth. The gender lens may become less of a factor at that point, as funds are looking to check certain boxes.”
Plus, climate fintech often attracts entrepreneurs who are passionate about sustainability and environmental impact. This mission-driven approach may resonate more strongly with female founders motivated to create positive change. Willi noted: “Women may be more present in climate fintech, as there seems to be a greater desire to generate impact and address major problems rather than just focus on financial returns. The general readiness to tackle climate challenges may result in more women being represented in the climate fintech industry.”
Venturing into climate fintech is never too late – key advice from a female founders
After speaking with the female founder, we felt that everything was possible. Here is some of their advice.
“Finding the right people to work with, validating the idea, and having a mentor – are the essential pieces of advice she would give to women looking to enter the climate tech space despite the challenges. The key is not to go alone but to build a strong foundation and support system before diving in.” – Briana Bao.
“Take a more measured, experimental approach to testing the business idea rather than jumping in fully. This can help build confidence and reduce the challenges and risks, especially for women entering the climate tech space.” – Eleanor Willi.
“Just do it. If you think about doing it, you should definitely do it. There’s nothing to be scared of. We need more champions and passionate people in the climate tech space.” – Monika Martinsson.
“Do your homework thoroughly – understand the space, the challenges, and the opportunities. Be 150% committed -founding a company requires relentless hard work and dedication. Know your subject matter – develop deep expertise in the climate tech field you want to enter.” – Puja Mahajan.
Is the future of climate fintech behind females?
The climate fintech sector has shown remarkable resilience, outperforming the broader venture capital market even during challenging economic conditions. This, coupled with the growing importance of sustainability and climate solutions, suggests the industry will continue to expand and innovate in the coming years.
One thing is clear — female founders and leaders are key to bringing a more collaborative, socially conscious perspective to climate fintech. This can help address the overly technical focus and ensure climate solutions consider the broader social context and impacts.
The post Insights: What can we learn from female founders thriving in Europe’s climate fintech space? appeared first on Tech Funding News.