2023 50 To Watch Trend Watch


 We extend our congratulations to this year’s Cleantech 50 to Watch companies and encourage you to explore the list. This year you will find companies across 15 sectors, from soil monitoring to solar to water scarcity and everything in between.

At Cleantech Group, our 2023 research team has been digging deep into a more ambitious set of technologies than ever, ranging from advanced geothermal power, to innovation in silicon anodes for batteries, to electrofuels for aviation (and nearly 25 other topics – inquire here for more info on our research service).

In our recent annual 2023 Global Cleantech 100 and 2023 APAC Cleantech 25, we had commented on two consistent dynamics: innovation in reaction to the chaos of the early 2020s and a building embrace of “bigger bets” for long-term sustainability. When we last put the Cleantech 50 to Watch list together, it was still unclear how much staying power then-recent 2022 events would have in cleantech trends – today, as the U.S. Inflation Reduction Act hurtles into its second year and Russia’s land war in Ukraine creeps towards its third year, we are seeing innovators lean hard into the hardest tech areas.  

This year’s Cleantech 50 to Watch marks a standout year in which “deep” tech solutions for sustainability are already impacting commercial markets or readying themselves to. Innovation targeting the most challenging and polluting sectors of the economy is setting a steadfast course for the late 2020s and 2030s. Industrial operators are starting to see the feasibility of profound sustainability solutions, and policy adjustments are pushing technological supply towards more favorable economic conditions.

Trend Watch

Even in the face of a tough macroeconomic landscape marked by elevated interest rates and limited venture return prospects, firms in these sectors continue to secure funding. In 2022, we observed more investments in deeper cleantech than ever more (see Figure 1).  If keeping the lens on these sectors through the first three quarters of 2023, these investments are even stronger as a percentage of overall venture and growth investments in cleantech. Another way to say it, we are moving the era of “asset light, highly scalable” as the primary growth evaluation criteria, and moving to an era where forward-positioning for supply into hard-to-change sectors is valued.

Figure 1: Venture & Growth Investments in Deep Tech Cleantech (2018 – Q3 2023)
Source: Cleantech Group

Our Cleantech 50 to Watch expert panel’s perspective echoed this trend, with a significant portion of nominations this year leaning towards companies in hardware, materials, and industrial processes.

The enthusiasm for deep tech companies with hypotheses for end-of-decade market growth is likely not a coincidence – the overall crop of cleantech innovators is skewing younger. The first half of 2023 saw seed investments make up their largest percentage of overall venture investments in cleantech, continuing a trend that began in 2019 despite a dip in 2020.

Figure 2: Venture & Growth Investments in Cleantech, % of Seed Investments vs. Overall (2018 – Q3 2023)
Source: Cleantech Group

As noted in this year’s APAC Cleantech 25 report, innovation in cleantech is going more global, too. The U.S. is still dominant, and the next runners up are generally predictable (China, Germany, UK), but it can be seen from zooming in on seed investments since 2021 that there is close competition between the next 10 or so countries.

This dynamic indicates that we may see continued regional shifts in innovation growth over the next few years as early-stage companies mature and aim to break out of their home markets. 12 of this year’s Cleantech 50 to Watch list were founded in countries outside of North America, Europe, or North Asia including:

  • 4 companies from Africa
  • 4 companies from South and Central America
  • 3 companies from New Zealand and 1 from Australia
Figure 3: Destinations for Cleantech Venture & Growth Investments, (2021 – Q3 2023)
Source: Cleantech Group

To gauge the future direction of cleantech innovation, observe the evolving ecosystems. While many venture capital funds are globally renowned in cleantech, incubators and accelerators often are mostly regional players. Yet, some have risen to global prominence – for instance, five companies on this year’s Cleantech 50 to Watch are affiliated with Third Derivative.

Early-stage incubators and seed investors that go even further upstream to venture building – the practice of first identifying promising technologists or aspiring entrepreneurs and then building companies around them – are generating some of tomorrow’s key players at a fast clip. Six of this year’s Cleantech 50 to Watch participated in a program or received investment from an entity with a venture-building mission statement. Breakthrough Energy Fellows, Breakthrough Energy’s program for high-potential energy and heavy industry decarbonization entrepreneurs, which only launched in 2021 – landed 3 companies on the 2023 50 to Watch list (note: Breakthrough Energy Fellows is a client of Cleantech Group).

We invite you to download this year’s Cleantech 50 to Watch — younger, faster, and gutsier. This year’s list is a testament to the dynamics that we are seeing slowly crescendo in the overall cleantech innovation universe, and indeed the same ones that will be necessary to tackle the most pressing climate challenges.

Lastly, a reminder that our mission as a team is to identify and understand emerging technologies to slow the pace or improve resilience to climate change, so that we can motivate actions from our network of subscribers and clients. Are you, a colleague, or one of your portfolio companies working on a climate solution? We want to know – reach out to our analyst team at research@cleantech.com for a chat.


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