Carbon-intensive practices in manufacturing are contributing significantly to CO₂ emissions, leading to a growing interest in greener manufacturing solutions among founders and venture capitalists. Despite a more subdued funding environment, the space has gained traction with over $10 billion in global investments across substantial funding rounds, according to Crunchbase analysis.
Crunchbase’s examination of the data reveals prominent sectors and investment themes within greener manufacturing. Battery recycling and the development of green steel are among the key areas that stand out. Notable financings in these sectors showcase the diverse range of investments within this burgeoning industry.
Battery startups have seen significant growth in funding, driven by the increasing adoption of electric vehicles (EVs). The interest in funding startups developing technologies for longer-lasting, more affordable, and environmentally friendly batteries has surged. Europe has emerged as a hub for battery-related funding, with notable investments going to companies like Verkor in France, which specializes in low-carbon battery manufacturing, and Northvolt in Stockholm, known for its lithium-ion batteries.
Battery recycling has also become a prominent focus, with substantial funding rounds for companies like Redwood Materials in Nevada and Ascend Elements in Massachusetts, specializing in sustainable materials recovered from discarded lithium-ion batteries. The demand for battery power is projected to rise to 2,035 GWh by 2030, primarily driven by the transportation sector. The global battery market is expected to exceed $475 billion by 2032.
Several funded startups are directing their efforts toward developing more environmentally friendly transportation modes and components. Infinitum in Texas, for instance, has secured over $350 million in funding to develop engines that claim to be 50% lighter and smaller than traditional iron-core motors, with applications in mobility. Glydways in San Francisco focuses on creating small, autonomous EVs for public transport and has secured over $90 million in funding. The electrification of the global transportation sector is ramping up as national governments push for supporting policies.
The building industry is widely recognized as one of the most carbon-polluting, responsible for around 39% of global greenhouse gas emissions. Investors are showing increased interest in startups that adopt greener approaches in construction and materials. Mighty Buildings in Oakland has secured over $150 million in funding for its innovative 3D-printed panels and materials, which facilitate faster construction with a reduced carbon footprint. Halio in California is developing dynamic glass that allows windows to change tint, resulting in energy savings in heating and cooling costs. Startups are also focusing on manufacturing sustainable building materials to construct carbon-negative houses, introducing alternative materials that reduce or eliminate the use of carbon-intensive concrete.
While green manufacturing startups are capital-intensive, infrastructure-heavy, and carry some risks, substantial investments are flowing into the sector. The biggest challenge lies in developing manufacturing processes that minimize environmental impact and carbon pollution. However, addressing this concern presents an opportunity for substantial rewards. The positive outcomes in sustainability and reduced environmental harm will far outweigh the risks and investments associated with manufacturing startups.