Finsif tukee vuosittain vastuullisen sijoittamisen tutkimusta stipendein
Finsif jakaa stipendejä vastuullisesta sijoittamisesta kiinnostuneille opiskelijoille ja tutkijoille. Stipendien jaon tarkoituksena on edistää vastuullisen sijoittamisen tutkimustyötä. Stipendejä jaetaan vuosittain enintään 8000 euron summalla. Vuoden 2026 stipendihaku alkaa keväällä. Lisätietoa
The International Energy Agency estimates that up to 35% of the global emission reductions needed by 2050 will depend on the deployment of emerging climate technologies that are not yet on the market. However, climate tech startups that are developing these novel technologies often face funding gaps at the commercialization stage due to high risks and capital requirements.
I examined the financing of these emerging technologies in my master’s thesis, which focused on the financing of first commercially relevant scale plants employing novel climate technologies, also known as FOAKs. My research was guided by the question: What elements contribute to the development of successful FOAK financing structures? To address this question, I conducted a qualitative multi-method study comprising 21 semi-structured interviews with financiers and startups, as well as a multiple case study of six FOAK financing structures. The six startups interviewed provided insights into different paths to commercial viability, as each had successfully secured funding for its FOAK plant.
The case study reveals that there are many paths to commercial viability. Successful ’FOAK archetypes’ often address some of the typical financing challenges (in brackets) of high-risk climate hardware. Especially two archetypes emerged from the analysis:
- Technological demonstrators (high technology risks): Startups that were effective in demonstrating their technology were able to unlock access to capital. Interviews highlight that financiers’ aversion to risk varies, with some financiers avoiding technology risk altogether. First commercial scale plant follows smaller sub-scale pilots, which can be key in technological demonstration and customer validation.
- Commercial validators (high market risks): Startups that were able to sign binding offtake agreement were able to unlock access to capital. Offtake agreements were often described as an effective de-risking method from the perspective of financiers, with certain financiers regarding them as an essential component in the financing decisions.
In addition, I examined why certain startups were able to secure commercial bank loans, which are often inaccessible in the context of climate tech SME financing. I found that recipients of private senior loans made FOAKs ‘bankable’ through various mechanisms, such as the use of public support, guarantees, collateral (e.g., standard equipment with higher resale value than non-standard equipment), and an existing capital stack (e.g., commitments from reputable investors). Commercial banks can participate in FOAK financing, yet their role typically needs to be isolated and/or strictly structured to minimize associated risks.
FOAK financing structures are complex, and the findings of the multiple case study imply that no financing element is sufficient on its own to fully fund the plant, suggesting the need for several capital sources. These may include traditional financiers such as commercial banks, public institutions capable of absorbing greater risk, high-risk venture capitalists who might be constrained by the size of their tickets, and alternative forms of financing such as crowdfunding. The findings align with previous research, which suggests that both a diverse set of financiers and patient capital are required to fund climate innovation. Patient capital providers offer long-term investments with an impact-first approach, addressing challenges related to insufficient risk-return ratios. My thesis provides evidence that the risk-taking capacity of private investors alone appears inadequate to scale climate technologies at the pace needed to meet climate targets, highlighting the critical role of this type of patient capital. While the results highlight the instrumental role of public institutions, it is important to note that private capital can just as well fit the patient capital role.
Aida Heikkinen
Aalto-yliopisto
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