The Climate Crisis Could Be the ‘Problem’ That Acts as a Catalyst to Draw in Australia’s Most Talented Into Tech

School students striking for climate action in Australia (source: University of Sydney)

ClimateTech Sector

The sector that has garnered the most VC-backed student-founded startups in Australia is ClimateTech, representing 13% of all deals. In developing our Student Startup Funding Report, we’ve identified the following ClimateTech, student-founded startups: 

Allume Energy Avarni Earth AI Envirometrics.io Monty Compost Co NetNada ULUU Xylo Systems Climasens (new addition since report release)

Despite this prominence in deal volume, ClimateTech startups only attracted 2.6% of the total capital invested in Australian student-founded startups. This discrepancy reflects a broader trend within the Australian venture ecosystem in 2023, where ClimateTech secured the majority of deals (10%) but only represented 7.8% of the overall venture capital investment for the year. 

A significant driver behind this trend is the nascency of many ClimateTech startups, which are still in the early phases of their development and have not yet progressed to raise substantial investment in later funding rounds. However, there is a noticeable absence of ClimateTech firms that have successfully matured over time. Given their capital-intensive nature, these startups often require longer periods to scale and achieve profitability, needing a degree of patience from investors that can lead to funding challenges during growth phases. 

But why are students building in this space so frequently? There has been a societal shift towards greater awareness and education regarding the climate crisis, a cultural change most pronounced among the younger generations. This was best demonstrated when thousands of students, from primary to secondary education, participated in climate strikes across 36 locations in Australia. 

Youth Led Activism

This surge in youth-led activism stems from two key reasons. Firstly, today’s youth stand to be the most affected by the consequences of climate change, inheriting a critical global issue they had no hand in creating. Secondly, they are the most informed generation about the climate crisis, thanks to a significant emphasis on climate education not only within formal educational settings but also through peer-to-peer learning and social activism. This has empowered them to embrace the responsibility of addressing this issue head-on. 

As negative as the potential outcomes of climate change could be, I see this as the ‘problem of our generation’, that entices and inspires a new wave of talented young individuals to enter the tech world. These ambitious youth, wanting to help find a solution, either by founding ClimateTech startups or by contributing as operators or investors within this space. 

This presents a unique opportunity for Australia, reminiscent of how the greatest startup ecosystems have been propelled by life-or-death events that required the most talented to move into innovation and technology to solve the problem. While I certainly don’t wish for climate change to escalate into such a crisis, I anticipate it will be the ‘problem’ that pulls our youth from traditional career pathways, and pushes them towards innovation and entrepreneurship. 

Imperial College’s Climate Pre-Accelerator’s Founding Team

Globally, we have seen university students build organisations to turn their activism and concern for climate change into viable startups. Imperial College has a student-driven climate tech pre-accelerator designed to help students bring their ideas to life. The inaugural program attracted 102 students, resulting in the formation of 13 ClimateTech startups, six of which have since launched. 

I expect these types of initiatives to grow, and I encourage students and those across the broader ecosystem to engage with our team at NextGen Ventures - opening a dialogue and potentially collaborating with one another. 

— Mitchell Hughes, NextGen Ventures