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10% of new high tech startups in Israel develop climate technologies

Startups founded in 2020 create innovation climate technologies, while the world’s largest climate-tech funds do not invest in Israel.

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For the first time The Israel Innovation Authority, released today (Monday) a report on “Israel’s State of Climate Tech 2021,” in collaboration with the PLANETech community – a joint venture with Consensus Business Group led by Vincent Tchenguiz.

The report examines the state of the Israeli innovation industry, as well as its current and potential future contributions to addressing global challenges posed by climate change.

As a result, the report identifies the cutting-edge technical businesses that are developing solutions to one or more of the world’s climate concerns.

According to the findings of the survey, the number of new startups dealing with climate challenges increased dramatically since 2014, peaking in 2016.

The share of these new climate companies in the total number of new high-tech companies climbed significantly, reaching 9% of all companies founded in 2020.

Among the 637 startups and growing firms developing climate innovations, are Climate Smart Agriculture, Clean Energy Systems, Sustainable Mobility & Transport, Eco-Efficient Water Infrastructure, and Alternative Proteins.

Most of these innovative businesses are small, with fewer than ten employees, and are under seven years old.

Over 560 private investment entities, large venture capital funds, have invested in Israeli climate companies so far, with two-thirds of them being foreign investment entities.

  • Between 2018 and 2020, these same firms invested a total of 2.97 billion dollars. In the first half of 2021, overall investments accounted for 40% of total investments in the preceding three years.
  • However, there is no single entity dedicated to climate technologies among the 20 biggest investment firms in Israeli climate technology. Furthermore, there is currently no designated climate tech investment group in Israel. Furthermore, the Israeli government invests heavily in climate-related businesses.
  • From 2018 to 2020, the state invested a total of $280 million in climate tech research and development, overseen by the Israel Innovation Authority.
  • The most major barrier for Israeli climate entrepreneurs, according to an unique poll commissioned for this research and completed by close to 200 Israeli climate startups, is accessing funding. Access to money is the top barrier for 72 percent of the organizations polled today, according to the report.

In comparison to the rest of the world, Israel – In the sectors of cultivated meat, irrigation systems, precision agriculture, and water desalination, Israeli technologies are at the top of the list of countries (G20). Israel, on the other hand, is far from realizing its full potential, as seen by its low participation and success rates in the Horizon Program.

The paper identified four challenge areas where Israeli climate innovation might have a big impact:

Clean Energy Systems: 235 firms, with 119 startups raising a total of $2 billion. With 34 businesses raising $265 million, Energy Storage was regarded as a field with very high potential.

Climate-Smart Agriculture: 212 enterprises, with 130 startups raising $950 million in total. Precision agriculture was regarded as a promising industry, with 69 firms raising $489 million in funding.

Sustainable Mobility and Transportation: 127 businesses, including 75 startups that raised $1.8 billion. With 69 startups raising $1.19 billion, New Mobility was selected as a field with very high potential.

Alternative Proteins: 45 firms, with 42 startups raising $364 million in total. With five businesses raising $185 million, Cultivated Meat was selected as a field with very high potential.

An examination of each area in terms of its rate of young companies (companies founded within the last three years) and the volume of investments reveals three main groups of technological areas: established fields (a low rate of young companies with a high volume of cumulative investments), which includes the areas of Clean Energy Systems and Sustainable Mobility & Transport; early emergence (a high rate of young companies with a low volume of cumulative investments), which includes the areas of Clean Energy Systems and Sustainable Mobility & Transport; and early emergence (a high rate

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