Sifted - The climate techs with surging revenues

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Climate tech has managed to remain one of the more buoyant parts of the tech sector, bringing in some of the biggest raises in the last year. But which climate techs are actually making money? Today we’re digging into some of the business models that are seeing surging revenues.

Elsewhere today:

• Do we need to get nannies to build unicorns?
• I'm thinking of starting a company - how do I know if it's the right time?

— Freya Pratty, senior reporter

Building your dream finance team

↗️ Recruiting and retaining a solid finance team is no mean feat for any company, let alone startups. So how can budding CFOs tackle turnover and build a robust team to boot? Tune into our upcoming Sifted Talks midday, June 12th to find out.

The climate techs with surging revenues

I write a lot about the European climate techs that are bringing in investor cash. But which business models are bringing in customer cash?

Europe has a lot of pre-revenue climate hardware companies which need to ensure there’s a customer base waiting at the end of the capital-intensive build stage. If there isn’t, there’s a risk that we’ll see a repeat of the cleantech bubble, a period of innovation from 2006 to 2013, where companies failed to develop sustainable business models. 

Swiss startup Neustark seems to have found a way to make money. The startup, which produces a machine that pumps captured CO₂ into waste concrete from demolition sites, reported a compound annual growth rate (CAGR) of 271% across the past three financial years. 

It’s the startup with the second fastest growing revenues in central Europe, according to the Sifted 30: Central Europe Leaderboard of 30 startups in the Czech Republic, Switzerland, Austria, Hungary and Poland, published later today.

Neustark sells its machine to recycling plants, which use it to store CO₂ in demolition waste. The end product can be used to create recycled concrete or spread across roads under asphalt.

The company tells Sifted that roughly half of its revenue comes from selling the machines to recycling companies, which pay for the appliances upfront. Neustark then pays the recycling company for every tonne of CO₂ it stores in concrete. 

The other half of Neustark’s revenue comes from selling carbon credits based on the amount of CO₂ the recycling companies store. It’s secured credit offtake agreements with companies like Microsoft and UBS, which pay $350-$500 per tonne of CO₂ stored, depending on the size and length of the contract.

“With the business model we have, we don't rely financially fully on credits, we also have the model of selling the tech,” says Sophie Dres, chief marketing officer at Neustark. “That's what is different and, honestly, what has attracted our investors.” Neustark has raised €1m in total and is raising a new round. 

Funding carbon removal from credits alone is an increasingly scrutinised business model. “Relying solely on carbon credit returns in a business model can present challenges, with a higher inherent risk,” Tobias Seikel, GP at Planet A Ventures tells me. If the price of credits goes down, credit-issuing companies can see their margins tightened.  

“Diversifying revenue streams while building a company, for example through technology or service sales, not only helps to mitigate the mentioned risk but also highlights the importance of adopting multifaceted approaches,” he says.

Other carbon removal companies diversifying away from credits include UK startup Mission Zero, which just received funding from Bill Gates. It sells carbon removal tech to companies, rather than selling credits. 

One-fifth of the Sifted 30 are climate tech companies, including Czech startup Woltair, which saw its two-year revenue CAGR increase 244% up to 2023; it brought in €46.1m in 2023. 

Woltair runs a digital platform that connects consumers who want to install a solar panel or a heat pump in their house with installers. In doing so, the company can capitalise off heat pump adoption without exposing itself to the capital intensity of installing them itself. 

Any other innovative climate business models I should have on my radar? Email me here. 

— Freya Pratty, senior reporter

👩‍👦 The Nordics is renowned for providing generous parental leave — but is it leading to a lack of female-founded unicorns? It is part of the problem, according to Northzone partner PJ Pärson, who at a local event in Stockholm last week advised women looking to build VC-backed unicorns to “consider getting a nanny”. “I think it's cultural. We create a lot of expectations that women should stay at home for nine months after giving birth,” he said on stage.

• Not everyone was impressed by his advice — and after local media site Breakit wrote up his comments, Pärson says he was flooded by comments.
• “This was part of a wider discussion on stage and it is hard to put it in the right context, but the focus was on building VC-backed unicorns, where the demands are much higher than building a bootstrapped startup or similar,” Pärson told Sifted’s Mimi Billing. 

🤔 I’m thinking of starting a company. How do I know if it’s the right time? In her latest advice column, Sequoia’s VP of talent Zoe Hewitt gives her advice to one reader with loads of experience at founder-led startups who is thinking of launching their own company.

🧐 Why fintech upstarts have failed to unseat UK banks. (FT)

🙋‍♀️ Less than a tenth of deeptechs are founded by all-women teams - this EU body wants to change that. (Sponsored by the European Institute of Innovation and Technology)

🏦 Is open banking living up to expectations? (Sponsored by GoCardless)

🇩🇪 Germany's fastest-growing startup teams.

📈 The 10 fastest-growing startups in the Nordics.

⚡️ The Baltics' fastest-growing startup teams.

😎 Meet Europe's fastest-growing fintechs.

June 4 | Paris. French tech reporter Daphné Leprince-Ringuet will be hosting our third breakfast reader meetup of the year at Station F. She’ll be joined by guest speakers from Miraki and Doctolib to discuss how France’s most established unicorns have approached — and are still navigating — the hurdles of internationalisation. RSVP.

June 4 | Munich. Newsletter editor Tom Nugent is moderating a panel on the state of Europe’s spinout ecosystem at Spinoff Summit 2024. Who should he meet while he’s there? Get in touch.

June 4-6 | Munich. Reporter Kai Nicol-Schwarz will be at Bitz & Pretzels healthtech conference. Reach out if you'll be joining him.

June 4-6 | Amsterdam. Fintech reporter Tom Matsuda will be at Money20/20. Drop him a line.

June 4-6 | Berlin. Editor Amy Lewin, DACH reporter Miriam Partington and senior reporter Anne Sraders will all be at SuperVenture. Going to be there? Drop them a line.

June 12 | Online. Tom Matsuda will bring together a panel of experts from Omio, Tipalti and Eight Roads to discuss how to build, nurture and maintain an airtight finance team to improve your bottom line, RSVP.

June 12-13 | UK. Amy Lewin is at Founders Forum. Get in touch if you'll be joining her.

Amsterdam-based Yondr, a developer and operator of hyperscale data centres, raised $150m in debt funding from the International Finance Corporation.

Stockholm-based Doconomy, which offers tools to help bank customers measure the carbon footprint of their everyday spending, raised $37m in Series B funding. UBS Next and CommerzVentures led the round.

Bristol, UK-based Kelpi, which creates sustainable bioplastic packaging from seaweed, raised £4.3m in funding. Blackfinch Ventures led the round and was joined by investors including Green Angel Ventures, Kadmos Capital, QantX, Evenlode Foundation, South West Investment Fund, Bristol Private Equity Club and One Planet Capital.

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