Katherine Keddie: Hello and welcome to Scaling Green Tech. We are Katherine Keddie and Matt Jaworski, co-founders of Adopter. Adopter was Europe's first marketing agency to specialise in climate tech and adaptation. In this podcast, we take you behind the scenes of climate tech's most inspiring journeys, from breakthrough scaling wins to game-changing innovations. Join us for practical lessons, proven strategies, and actionable insights from founders, investors, and changemakers, making climate solutions and adaptations a reality. Today on Scaling Green Tech, we have Federico Cristoforoni. He is the co-founder and managing partner of Net Zero Insights, which is a leading market intelligence platform powering decision-making across the global climate tech ecosystem. In today's episode, Matt and I will go into a deep dive of Federico's new report, which is an expansive look into climate tech in 2025. So be prepared for topics including which technologies are on the cost of scale, what the investment landscape looks like this year and in previous years, and which geographies are making moves when it comes to climate tech. So please sit back and enjoy. Hello, thank you so much for joining us.
Federico Cristoforoni: Hi, thank you for having me.
Katherine Keddie: In today's episode, we're going to be diving into insights from climate tech in 2025 and his new report, which has just launched at the time of recording. But first, the difficult question that everyone has to answer to start our episodes: how would you describe Net Zero Insights to a five-year-old?
Federico Cristoforoni: So I absolutely didn't prepare for this question, so it's going to come out super natural. I had to think very hard about this answer. So I would explain it to a kid as a big map of superheroes that are here to save the planet. And this map says where the superheroes are, what their powers are, and who's ready for the mission and who needs a bit more time and training to prepare.
Katherine Keddie: Very nice. And then for those adults listening, give us a little bit more flavour. What do you do? How long have you been doing it for? Why do you do it?
Net Zero Insights' platform and customer base
Federico Cristoforoni: So for adults, I started NetZero Insights six years ago, so that's quite some time already. And we are a market intelligence platform specialized exclusively on climate innovation and the NetZero transition. We focus on companies with a commercial presence. We start tracking companies when they have a website, a product, something to sell, through to exit, going public being acquired or becoming a market leader so from the very early days down to market and deployment. To explain specifically for people in our segment what we do i think we provide general insights, intelligence, as many other generalist providers do, but designed and conceived for climate tech and net zero, and enriched with data points that are very meaningful for the space, such as the technology readiness level of the solutions over time, the offtake agreements and commercial partnerships and the deployment from pilot to demonstration to first of a kind and full-scale plants and facilities. I think I like better the explanation for kids.
Katherine Keddie: The explanation for good is definitely easier.
Matt Jaworski: Yeah. OK, that's that's all good and nice. But who actually needs it? Who are the customers for you?
Federico Cristoforoni: Yeah. So we have investors, corporates and governments and advisors to any of them using Net Zero Insights to specifically conduct deep market research in the space and to identify, assess, and explore new opportunities. There might be new suppliers for corporates, new investments for investors, and a lot of information and market research.
Matt Jaworski: Okay, so essentially when corporates are looking for innovation, right, either to pilot or to invest in through their corporate VC arms, they would use your platform to shortlist suitable companies?
Federico Cristoforoni: Yeah that's spot on we work with innovation departments so the open innovation venture client looking for providers is a big use case but also with strategy department, between sustainability departments, like the idea is also to track market trends, specific technologies. Go beyond the market sentiment what you hear and think it's happening like there is definitely a bit of that. But also seeing what's stalling, what's not happening, and yeah, so the big picture.
Matt Jaworski: Okay, so for example, that there is an opportunity in, let's say, consumer level energy storage batteries for homes, and that the big companies are currently not making these, but there are some startups that they could pilot or maybe acquire in the future that would give them benefit when this technology picks up in, let's say, part of the world.
Federico Cristoforoni: 100% then the specific example or segment varies. The idea is that usually corporates know these are the areas that are interesting for me and they're very specific and we can go to that level of specificity. And then yes, they might track the evolution of a certain areas and say, you know, sometimes it can be too early for them, but still they want to know if anything happens there. And yeah, all the rest you said, it's 100%.
Matt Jaworski: Okay. I mean, before I give Kat a chance to, you know, bring us back on the main track, the question that's coming to mind is, do you have any sort of, you know, success stories, like case studies that you could talk about that, you know, there was this company that you guys helped someone identify, and then that led to investment, acquisition, those kinds of outcomes. Now, obviously, I very much understand that in this world, everything like this is behind many NDAs. But maybe still there would be something you can talk about in very general broad terms.
Federico Cristoforoni: Yeah, I think it's hard to say directly. you know, many companies find opportunities, potential suppliers, like that's our job. Like that's where we have to do our part. Then saying that they invested in the company or that they bought the product because of us is maybe too much credit for our job.
Matt Jaworski: It reminds me of the conversation we had earlier about like, you know, how can you, how can you, for example, attribute a company name change to them getting more clients if a purchase cycle takes two years time, definitely helped. But a lot of things gets to align along the along the way, right? Yeah. Starting with the salesperson on the company side, making a good first impression to then lawyers agreeing a contract for a sale to actually happen.
Federico Cristoforoni: Yeah. And so, yes, we play our part and we try to do our best in saving time and make it very comprehensive and give our customers all the information they need to make the decisions. But they are the ones making the decisions. They spend a lot of time thinking about it. They are experts in the segment.
Matt Jaworski: And if it wasn't valuable for them, they wouldn't be coming back.
Federico Cristoforoni: For sure.
Katherine Keddie: So I think we understand the context that you have been looking at how the wheels turn in climate tech for years. Also, since climate tech was just an initial idea and starting to grow as a concept for investors and for companies, how has it changed in the last five years?
The shift from climate hype to commercial fundamentals since 2021
Federico Cristoforoni: Very good question, and for context, so we have this platform, we have our own data, intelligence, and research, but then we've been publishing a series of reports since 2022, every quarter for free, the State of Climate Tech series, and that's really a way for us to track market trends, see you know also celebrate success but also spotlight. New opportunities and challenges of the ecosystem so we've been doing this for a while the report we just launched yesterday and again thanks so much for having me today and talk about it. It's our fourth annual publication which is a bigger report more in depth and a lot changed since 2022. The short story is that in 2021 and 2022 there was a lot of hype in terms of investment enthusiasm perhaps even a bit of a euphoria on innovation being able to save the planet. And then right now, in 2025, it's a way more selective and sober environment, I think. Comparing the two periods, it's from hype to fundamentals, economics and profitability, which makes sense. It might sound a bit pessimistic, and it's not the easiest time for companies in this sector to get things done. But at the same time, if you're a business, we have to make things work. And it's a good sign that everyone wants the solutions to be real. And that means to be cheaper, better, faster, and deliver things on time, and all the things they need to be successful, which are not easy things.
Katherine Keddie: Yeah, in the report, you say we've gone from climate ambition to commercial performance. Yeah. And I think my question when reading it was, do you feel that that's a natural settling of the market from an initial hype? Or is it a downturn that's kind of more substantial than you would imagine following that kind of excitement of the early days?
Federico Cristoforoni: It's a difficult question. I think the way we frame it is there was this big narrative shift. So we were indeed talking about climate impact, net zero, ESG language. So the idea of solving a big problem, and it was a big, important problem, was maybe good enough for forgetting people interested in talking about it and try it out right now it's really about does it work how much does it cost and this is the general framing. I think that's the result of many other things. It's definitely tougher macroeconomic conditions. There were also a few high-profile failures in this space in these years. Many investors did not get the returns they were expecting. So, it's a lot of different pieces coming together. But another aspect that I think is also very important is that in 2021 and 2022, if we're speaking about investment, there were a lot of what the sector calls generalists, so like funds that are not exclusively investing in climate, jumping on board, right? And so,
Matt Jaworski: So just like it's happening with AI and now as of late with defence, right?
Federico Cristoforoni: Sounds like that for AI, you know, and I know it a bit less, but I mean, the enthusiasm is comparable.
Matt Jaworski: Yeah, I mean, there were those memes, right, that people who now have defence in their LinkedIn bios often had Web3 slash NFT a couple of years ago, then Climat, then AI, and now they jumped on the defence trend.
Federico Cristoforoni: Jumping on the best ship.
Matt Jaworski: Yeah, on the fast bandwagon.
Federico Cristoforoni: Yeah. Yeah. I think climate was in that position in 2021 and 2022. I feel it was a more meaningful problem. And I don't know. I really like the sector. So I am probably very biased.
Matt Jaworski: I guess the problem is the same, right? But the hype, the interest was like increased because of this and people were focused on the problem when they were jumping on the bandwagon without necessarily this very strict financial focus, maybe hoping for some regulation, for some changes to come. that have not come through. And now there was sort of like a downturn also in regulation in this direction. And again, they're flowing away into the current hype areas.
Federico Cristoforoni: Yes, and you're right. The regulation bit is another big factor. Maybe back then it was enough to say there's going to be a very high carbon price or this piece of regulation is going to come in place and then you're going to have You're saving money now by trying to implement this when the regulation is gonna come through. Hopefully, the regulation will come through one day, but right now, the possibility of a regulation coming into place is definitely not something that will convince investors, and maybe back then it would have.
Matt Jaworski: Yeah. I mean, this reminds me of a newsletter I received from one of the startups I've been following. So they're called NanoPlume. They do aerogel-based insulation that is in quite a few ways better than previous types of aerogel-based insulation. They went through Carbon13 and every couple of months, their CEO and founder, Teresa, sends out a newsletter with some updates. And the most recent one starts with a phrase from investors, we like green if it makes green. And that summarises this sentiment very well, something that we also talked about just before starting the recording of this episode, right?
Federico Cristoforoni: I think it's also fair. Investors' job is to Get money back and get more money way more money otherwise you know the people who gave them the money we put in a or something else. And yeah i mean the transition works if it makes economic sense and i think the people in the sector always knew that. But it's definitely a more complex sector from many points of views than software as a service, right?
Katherine Keddie: Yeah. Do you think we're past a time where people can justify there being kind of a green premium on top of their products? Or do you think there are pockets of interest where the value is justified, the value and the cost difference are justified?
The green premium debate and positioning around cost and performance
Federico Cristoforoni: I think it depends very much on every industry, the maturity, the different solutions, and how hard it is to solve the problem. So it's hard to generalise. But in general, I think a solution needs to be cheaper, better, easier to deploy. It needs to be… comparable to the existing one and better in every dimension and significantly better in order to incentivise the buyers to actually make the switch. So how that translates into, you know, how big is this difference to be, it's hard to answer. But I think significantly it's… Yeah.
Matt Jaworski: I'm just thinking that you could have a situation where the material itself might be a bit more expensive, let's say, right? Some kind of material. But the saving it generates over its lifetime is actually substantial. So then without price parity you actually still have financial benefit, but you could say that in a way this is kind of like, I know, some form of like a lifetime price parity. But obviously it would still be a much tougher sell than if it's price parity and it's better and generates more savings, or if it's cheaper and generates more savings. What do you think, Kat?
Katherine Keddie: I totally agree. I mean, here's the thing. it's always going to be easier to sell something that is better and cheaper than the original. So I think what I took from your report in particular is that there's sort of just a natural reckoning, like you said earlier, the economics of how something scales and how a market works that has naturally fallen into the industry. So I think that in some ways was to be expected from the initial hype and the excitement at the beginning. Something you said in your report is that the kind of defining term for investors in 2025 looking at climate tech was selectivity. What do you mean by that? What findings did you have there?
Investor selectivity and the drop in transaction volume
Federico Cristoforoni: Yeah, so the level of investment over time remain pretty stable so there was this boom of investment in 2021 and 2022 so higher bar charts in the report we have a chart showing this number very clearly and then in 2023 the level of funding collapsed and then it stayed stable and this is the volume of funding. The other dimension is how many transactions actually are happening every year so across how many transactions this level of investment is spread across and the number of transactions in 2025 versus 2024 decreased very quickly so there was a big drop and then i think the rational take away from that is that fewer companies are actually getting funded than that before so investors are more selective and the market is more selective and another possible take away is that. Those companies that are managing to raise this capital must be. The best companies out there so delivering on this commercial traction this proof of concept. It's gonna work right on top of course approving the technology works that also the market wants it and is ready for that which is. Altogether very impressive results for this kind of businesses. So yeah, we think selectivity describes that well. At the same time, the story is more complicated than that. So now we've been talking about the top businesses, but if we look at the general space, we have additional numbers and we see that now it takes longer on average to fundraise today versus 2022. And specifically like what's the graduation rates of the number of companies that make it from one state to the other we have i think interesting numbers of fifty percent fewer companies. That's reached seed are making it to Series A. And 80% less companies in 2025 versus 2022 are making it from Series A to Series B. So the market changed, toughened up. There are many companies that still make it. It's way less than before.
Matt Jaworski: Have you noticed any sort of regional geographic differences?
Geographic shifts in investment - US, India, UK, and China
Federico Cristoforoni: Yeah. So many. So many differences. I think the US is probably one of the most interesting markets to think about in this universe of this year. So the new administration effectively change direction completely for the sector. IRA and other public funding programs were rolled back. The market almost, this ESG language net zero, I think that's especially true in the US and it's becoming also a bit more true for Europe and globally, but in the US it's nine times out of ten the actual narrative. So all these things together are making the US not the ideal place for a company in climate tech to be in. It makes it more challenging. At the same time, the US is the US, so very strong market demand, like internal demand, very deep capital at every stage from starting to scaling, and so on. The US, from our numbers, is actually one of the few countries that is doing a bit better than last year in terms of investment. So not only remain stable, but it had, I think, a 7.5% increase year over year. And I think most US investors wouldn't expect that. That's not really the feeling you will get from being on the ground. And I think the reason for that is again maybe a marketing problem like many things that we call climate tech or we used to call climate tech. Are still very important today for everyone and very much aligned to the narrative of resilience manufacturing sovereignty so a few examples might be critical raw materials and supply chains or energy independence, flexibility, stability - it all falls under what we have been calling climate tech. But you can't call it anymore like that. If you call it for energy independence, everyone will love it.
Matt Jaworski: We had this conversation an hour ago, right? And I mentioned an investor who I met at an event roughly a month ago. I mentioned something related to climate tech as a focus of our podcast, of our work. And he said, Oh, climate tech. It's bullshit. It's bullshit, man. Just like, you know, saying it makes no sense that it's like getting ruled out. And when I asked him what he invests in, he said, oh, for example, energy manufacturing, which, you know, people in the space would consider it to be climate tech and thinking that and recognizing that climate tech goes beyond just concepts related to carbon markets, carbon trading, or anything related to green premium, that it includes those very like tangible sectors with very specific and much needed benefits. Of course.
The narrative shift from ESG language to resilience and sovereignty
Federico Cristoforoni: And I think, you know, on the reality is that it's on the founders and the companies to position in that way instead of, we're saving the world, we are doing specifically this, this is a big problem for your everyday and we're actually saving you a lot of money. That's very much aligned with the positioning from the hype to fundamentals kind of narrative, right?
Matt Jaworski: Yeah, I mean, I think Kat even recently had a conversation with a founder who has a technology in a specific space that they were pitching as focused on regulation that might come into the space or not, because it's been in a talk for quite a few years. Well, there is a big value in their technology because it essentially removes a very expensive stage from a particular process, meaning that it can be actually much cheaper, require lower expenses for a manufacturing plant. But that was sort of buried, you know, as like a third or fourth point that they make about the advantages of their solution.
Katherine Keddie: Yeah. And I mean, one thing about that example, too, is that was very much a kind of a localised element to the value as a value driver. And I think that also fits in well with changing policy direction, changing political will, more of a focus, like we said, on defence, an idea of kind of sovereignty and ownership of the key resources on which your economy is built. So I mean we often in our work actually focus on how do you bring out other value drivers and then sustainability in whatever aspect your work relates to is kind of like an undercurrent, an extra thing that you emphasize about the work that you do in the way that it fits into regulation, in the way that it's more efficient or more kind of circular. But leading with that in this current environment, I think, is an extremely difficult sell. And also, you're missing a value driver that is actually relevant to your investor or to your customer. It's much easier to sell, like we said, this is better for your work.
Matt Jaworski: Savings, improvements.
Katherine Keddie: Yeah, exactly. Going back for a moment to the comment that you made around fewer companies getting to Series A and then to Series B, we talked about geographies, but how do you see that in terms of different industries? Because I feel, you know, reading your report, there's a huge difference between what's happening in solar, for example, and then what's happening, for example, in nature tech, which is still quite a nascent industry.
Graduation rates by sector and the second valley of death
Federico Cristoforoni: Yeah, that's a very good question. And I think it's more and more true that the climate tech umbrella term includes very different things from purely software solutions to very, what we call, I think most of the ecosystem does as well, hard tech, so science-driven innovations that require actual physical infrastructure deep engineering and long are in the cycles. Very different ways of operating timelines and so on and then. They apply to different sectors as well so energy transport nature adaptation all very different sectors so. I think there are some segments that are definitely more secured or in a better position given the general context. Some of them are, the AI push is very significant in the sense of energy demand. So anything in energy, especially the, flexibility, grid infrastructure, generation, those solutions are high in market demand in the context of energy demand for data centres. Then there are also in the energy generation part, for instance, in the US, things like geothermal and nuclear are actually incentivised by policy. I think it's the AI Act. So there are actual efforts to support those. the manufacturing world, I think it's actually more about the efficiency of processes rather than completely new materials and things. But that, together with the supply chain and the critical raw materials, again, better positioned. Yeah, I think the who's not doing well in terms of sectors and different maturities. Things like the voluntary carbon markets are still not back on track from when they were a few years ago. I need some maturity we think very interesting thing coming out of the report is that we looked at the. Distribution of companies by their stage we're talking about hard technologies only and we see that in 2022 the majority of companies was at the prototype stage so. Yeah and right now in 2025 the majority is at the demonstration stage so the center of gravity shifted just in a few years so that means the day after the first valley of death. Meaning the technology works right they prove that the majority of them prove that and now they are again stuck at the. Does this work for the market scale commercialization real market demand and that's actually a very famous problem it's called the second valley of death and I think again it signals maturity so the technologies make it a good smart people that know what they're talking about and they are effective but then the market has very different rules and I think it's a good picture of where the market is.
Government grant funding retreating from early-stage innovation
Katherine Keddie: I mean, one other thing that came out of the report was there's a kind of quiet reduction in grant funding, accelerator funding, that kind of early stage R&D. Do you think the results around organisations moving to a slightly more mature stage are reflective of the reduction when it comes to accelerator and grant support? Or do you think it's a maturity in the markets? Because surely that has an impact, right?
Federico Cristoforoni: 100% again, many factors as a geography sectors, like many factors, but what we are seeing is that, especially in the US, but not only government grants are indeed retreating from the very early stages for breakthrough innovations. That means, you know,
Matt Jaworski: less breakthrough innovation will get funded and then that will probably be sort of like a trailing maybe metric that you will see more and more in like a year to three years in your reports right there less companies on the prototype stage or getting to the further stages.
Federico Cristoforoni: Yes, and actually in the same chart that I was talking about before, we already can see, like here over here, a decrease at the beginning of the pipeline. So the R&D phase, TRL-3, the number is actually decreasing. So less companies are starting to to solve these big problems and now it will be even less. The report doesn't necessarily say that, that's my opinion, but I think, you know, in the last couple of years at least, a founder might prefer to do something in AI rather than in cement or nuclear, right? It's easier, it's faster, you raise money.
Matt Jaworski: More funding, you have to fight for it, maybe less.
Federico Cristoforoni: And maybe also bigger payoff for you personally, right? So I think that market sentiment influences everybody, like from the founders to the investors to the accelerators. there is a cut in very early stage of funding support. And yes, it will mean, and I think it already does mean, a cut in the pipeline of companies in the space.
Matt Jaworski: I know what it reminds me of, those kinds of demographic charts, especially for Europe, like the falling birth rates and how the population at a specific age bracket is, again, decreasing. So yeah.
Katherine Keddie: A knock-on effect.
Matt Jaworski: A knock-on effect, exactly.
Katherine Keddie: Yeah. The report also said that one in four companies in climate tech are AI-focused. Yeah. And that it's allowing companies to move a lot faster, more efficiently, to access more funding. Can you tell us more about those findings and what you think it means for the sector going forward?
AI as a structural component of climate tech solutions
Federico Cristoforoni: Yeah. I think our universe has been talking a lot about the demand side and the excitement for energy companies to support the growth. That's a big opportunity that everyone is talking about and rightfully so. In the report, we look at a slightly different, very different angle, which would be AI as an enabler for climate tech. And the finding is actually in terms of investment, and it's 25% of the investment this year went to companies that are actually using AI as part of their core value proposition or offering. It can vary a lot, right? It can be, again, for things like… energy demand, or balancing, or grid optimisations, or the flexibility universe in general. Or it can be to, I don't know, material discovery. So now it takes way less to discover an amazing material that solves every problem in terms of property costs and feedstocks. I don't know. geothermal or steel production with higher efficiency. So all of these examples, that means that the AI is becoming part of the solution. Of course, it's also part of the problem in the sense that more emissions and a lot of things, but it's becoming a structural component of the climate tech solution landscape.
Matt Jaworski: I'm actually, I know in a way, interested, maybe surprised by the 25% figure. Because I remember having conversations with some founders over the last two years, let's say. That's essentially, maybe with some investors who are just generally reading on the news, right? That company startups have to embed AI into their solutions, kind of like that. AI is not in itself like a USP for a startup, especially in this space. Overall, startups in this space have to embed AI into what they do to do it better, to do it faster.
Federico Cristoforoni: It's a very fair observation I was about to reply to you. It's not only about making all the operations more efficient, but really focus on the core value proposition. So your core value proposition is enhanced significantly by the implementation of AI, which I think it's actually harder than it sounds like, at least our experience, everything. GenAI is amazing and super useful, but then to make it work at the level of accuracy and precision that you actually need in many applications, it becomes way harder and it takes longer than we expected, at least. So that's one side. I think the definition we are trying to frame there would be meaningful and very much aligned to the core offering of the company. At the same time, we are data providers, we do our best to be very specific and accurate, but the problem of aggregated findings is that there are a lot of nuances and assumptions. And again, we are generalising and putting everything in one box when often it's not. So I think it's a good observation and you might be right.
Matt Jaworski: I'm curious also how this percentage will change in the coming years. We'll find out from your next reports, I hope. Yeah, exactly.
Adaptation's growing share of total climate tech funding
Katherine Keddie: Another topic I would love to jump onto when looking at the results was you also talked about adaptation creeping in as an investment focus, as an area for innovation, obviously within the context of looking at climate tech investment as a whole. Firstly, what role does adaptation play in the investment landscape? And secondly, how do you see that changing, let's say, in the next two years?
Federico Cristoforoni: Yeah, so adaptation aligns very well, again, with this narrative shift. So resilience and adapting to whatever is coming sounds like a good strategy today. And our reports is highlighting that the share of funding going to adaptation out of all the climate tech universe is now 8%. So it starts to become significant. In a couple of actually five years ago it was like four so it doubled ever since pretty consistently, which is maybe unusual for other segments. I think it makes sense. Again, the context is, in many narratives, it's too late to avoid many of the tipping points, and we have to prepare for extreme weather events, for flooding, for wildfires. The perception then is that also this happened more and more. And so this affects, again, the sentiment and where most of the bets are placed. I think, as you were mentioning before, adaptation is indeed affecting everything, like every physical asset and every decision for people managing assets and money is something that they are thinking about. So it's definitely, in my opinion, it's something that is hopefully just starting. It sounds like a very big opportunity for something very urgent and unfortunately almost inevitable.
Katherine Keddie: I think there's a weird dichotomy within climate tech where people consider adaptation, financing, growing as part of a pot that already exists for climate tech or for mitigation as a whole. Whereas I think framing it more as adaptation is something that every single investor, every single decision maker in a business has to consider when planning for the future because, as you said, unfortunately it's inevitable that we have to invest in this way. It's a much more realistic way of considering it and then also doesn't put us in this view of thinking, okay, well, if we spend money on adaptation, there's going to be no money for mitigation because the two things aren't necessarily hand-in-hand. For listeners that are interested in hearing more on this topic, we did a really interesting, expansive episode on the adaptation economy as a whole with Dr Simon Zadek, who is founder and managing partner of Morphosis and insights and investment solutions business focused on adaptation. And he kind of talks in more detail about how adaptation is fundamentally a lens that will define the next 10 years, next phase of investment decision making.
Federico Cristoforoni: Sounds like an episode that I have to watch.
Katherine Keddie: Highly recommend.
Federico Cristoforoni: I will, for sure. I don't know the specifics, but I think I understand the narrative and I think I mostly agree. I really like the point that you made, that it's not the carbonisation money competing with the adaptation money, it's a way larger pot. Maybe, if anything, we could steal some money from AI, you know, like building a website faster or, you know, lots of things that are very cool, but maybe some less of a priority. And yeah, so the money is not competing, the problem and the opportunity is big for adaptation as it is for decarbonisation and the energy transition. We're talking about very big markets with very systemic changes and very big opportunities. The advantage that adaptation has maybe over mitigation is that adaptation might also be a bit more software-driven. It's not true for every vertical. I can think of adaptation examples in agriculture or extreme weather. actual management rather than just the forecasting bit and preventing and all of that. But yeah, I think definitely an exciting space and I think investors are closely monitoring that and it's interesting to hear that there are also new funds just dedicated to that. I heard of at least one other and probably there are more.
Katherine Keddie: do you see this changing in the next year? And then when you're thinking about doing the same report this time next year, what do you think more broadly the results will be? How will the landscape change? Could look into your crystal ball.
Matt Jaworski: Let me say, this is not like professional or legal advice, just your best guesses and assumptions. And then, you know, we'll see in a year's time how they fare.
Cristoforoni's outlook for 2026 and beyond
Federico Cristoforoni: Yeah, exactly. The reality is that we don't know, right? But we can translate market sentiment and the data and the conversation that we all have and try to project that or put together different forecast and then trying to get there but i think i think 2026 is not going to get easier in terms of fundraising market environment and so on so i expected this profitability and. Cash force to kind of approach to persist and i don't think it's necessarily a bad thing especially if we see the results of companies actually making it. deploying things that work a lot of market adoption like. I don't think 2026 will be too soon to see those results expect 2026 to maintain the same. Similar market sentiment and environment. Open in 2027/2028 it's also very much linked to the macroeconomic. conditions which are not helping anybody. So hopefully at some point that will also turn around.
Matt Jaworski: You know, the thing that I'm curious about will be the AI use rate, because it now became a topic of personal and professional interest.
Katherine Keddie: Yeah, for sure. I mean, I also think, you know, there's a distinction between AI enabled, which surely must reach into every company, like you say, an AI core and seeing what that looks like and seeing if the hype has changed or if that kind of, maybe if climate tech, like you say, is slightly slower moving because of high tech focus in this area and maybe there's a kind of a transition that we see next year. Last question for you. Was there anything from the report this year that surprised you?
Federico Cristoforoni: Yeah, a lot of things. So everyone listening should definitely download and read it. At least scan through the report.
Matt Jaworski: We'll link it in the episode description.
Federico Cristoforoni: Awesome. I think one thing that comes to mind is the allocation of investment by country. So the US is on top by very much. Second is now india which i think it's a it's an expected that you actually had a more than double their investment level from the year before. And they passed the UK for this year. The UK didn't have a very good year in terms of investment, hopefully just very temporary, and the UK is a very strong ecosystem for climate innovation, so I'm sure it's going to pick up again. And yeah, another thing just to give a bit more context in the same table, we have China coming up as fifth. The problem there is, I don't think that's very true. We observe publicly available data and put together our data and we print it out also for transparency and show our assumptions and limitations. In China, many things are not actually disclosed, so there isn't much transparency. So we would expect, of course, to be closer to the top of the table rather than to the fifth position, just for context.
Matt Jaworski: Yeah, I mean, it reminds me of some stats I saw a while back. Again, it was some reports from, I don't know, 2022, 2023, that were positioning China as like the second after US globally. Something like this. Again, it was a while back. I don't remember the details, but that aligns also with what you mentioned about, you know, it depends how the data is prepared and what the country is disclosing and what it's not disclosing.
Federico Cristoforoni: Absolutely. I mean, China is definitely a leader for batteries, manufacturing in general. The critical raw material and global supply chains depend on China. China is undoubtedly a massive player in the transition. If you're looking at how much capital is going to private startups there, it's just one little way to frame it and to think about it.
Katherine Keddie: We're coming to the end of our time, so I will give you an opportunity for a call to action to our audience. Firstly, where can they find you? And secondly, what is next? What should they check out other than obviously the report, which I assume is available now on your website?
Federico Cristoforoni: Yeah, so they can find me on LinkedIn or via email. Federico at netzeroinsights.com. find me there. A call to action to the ecosystem, I think it's interesting. I invite the brilliant founders out there that are doing the difficult stuff and working so hard, and we're essentially saying that it's going to get harder and take even longer. Keep going and to try to embrace this money for the narrative in all their conversations with customers with investors because i think. That's the defining narrative that makes sense for everything and they should stick to it and investors will keep expecting this. Yeah so maybe that's the. Go to action keep keep going sharpen your. not your technology, but your value proposition and what you actually deliver to the customer.
Katherine Keddie: A very rousing call to action. Thank you so much. And thank you so much for all of your insight on this episode. It's been a really interesting conversation and I can't wait to meet back this time next year to go through your predictions and see if they came true. So thank you so much, Federico. Thank you so much. Thank you to all the listeners. We will see you next time on Scaling Green Tech.
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