How CleanTech Will Impact Smart Cities

CleanTech is making cities smarter

The concept of smart cities is not new. Originally thought up in the 1970s (and perhaps imagined as a real life version of the Jetsons), smart cities were perceived as the answer to the increasing needs of a growing population in large urban cities.

While smart cities are comprised of a variety of elements including smart healthcare, smart infrastructure, smart building, and more, cleantech was never one of those elements, despite the tremendous impact it could have on smart cities.

A recent Bloomberg article delved into the trend of cleantech startups rebranding themselves in an effort to appeal to the smart city niche and make a difference in communities at an accelerated rate.

Join us as we explore the broader shift taking place in the industry and the innovative enterprises and startups leading the way in cleantech.

Shifting Industries without Shifting Solutions

CleanTech was popularized in 2002 with the foundation of the CleanTech Venture Network by Nick Parker and Keith Raab, as companies began recognizing the social and financial benefits of sustainable and green energy.

Despite the global movement toward a more environmentally conscious world and the popularization of the term cleantech, funding for startups in the space has been on the decline for many years. In fact, 2011-2016, a time when general venture capital funding was on the rise, saw a decline of nearly 30% in cleantech funding, making it an undesirable industry and a term many stayed away from.

Between 2011-2016, funding for cleantech startups dropped by almost 30% Click To Tweet

During this time, the concept of smart cities continued to rise in popularity, and the recent recognition that cleantech could be adapted to smart city innovations has changed the industry drastically.

As a result, more and more startups have rebranded their messaging without needing to change their solution, and are now looking to transform the smart city space. These startups have been affirmed by the likes of Bill Gates, Jeff Bezos, Vinod Khosla and more who have formed a new VC firm, Breakthrough Energy Ventures, and committed to invest more than $1 billion in cleantech startups in the next 20 years.

Today it is difficult to find a listing of cleantech startups, since so many companies have shied away from the term. Instead, startups have categorized themselves as being in the transportation, Internet of Things or energy sectors.

However, their impact on sustainability and green energy makes them cleantech in everything but name, and their potential to make smart cities a global reality is greater than ever.

CleanTech or Smart Transportation?

It’s no secret that startups and enterprises are working to create an autonomous car – something that is seen as an imperative part of the smart city movement.

While the autonomous vehicle conversation often centers around machine learning, AI integration and improved quality of life for smart city inhabitants, it can just as easily be shifted to focus on the environmental impact such cars can have on fuel consumption and use of renewable energy resources.

Companies that are focused on the environmental aspects of smart transportation can be an active and important part of the integration of smart transportation in smart cities.

Breakthrough Energy Ventures committed to invest more than $1 billion in cleantech startups. Click To Tweet

One example of a solution that can impact smart transportation is the recently founded May Mobility. The recently launched startup approaches autonomous transportation from a unique perspective, focusing on communal transportation in business districts.

LimeBike, which is categorized by Crunchbase as an Internet of Things and Ride Sharing startup, is, at its core, a solution that increases the availability of a clean transportation alternative in large cities.

Their deviation from the cleantech term has perhaps helped them raise more than $62 million in funding until now, but the rising popularity of cleantech as a part of smart cities may make them change their tune in the future.

Smart Energy can Benefit from CleanTech

The need for smart energy as a critical aspect of smart cities is well known, however few smart and sustainable energy companies categorize themselves as CleanTech.

Companies such as SunRun, who have already raised over $1.3 billion, simplify the process of implementing solar electricity solutions for private homes by providing affordable solutions to outfitting homes with solar panels. Despite clearly reducing the reliance on environmentally damaging energy solutions, SunRun has not been categorized as a cleantech company (until now).

Tibber, a startup hailing from Stockholm, is a clean energy solution that helps homeowners understand their energy consumption and improve their energy saving capability. In doing so, Tibber is able to help individuals reduce their energy use, their monthly costs, and ultimately, improve the environment.

Tibber’s ability to simplify digitalization of power consumption, however, makes their impact on smart cities even more notable.

Leading the CleanTech 2.0 Revolution

While startups and enterprises in the cleantech space have shied away from it for the past few years, the importance of cleantech has never died down entirely.

During this time, Nordic Green has been proudly keeping tabs on the more than 400 cleantech startups hailing from the Nordic, Baltic and Arctic regions. The site lists companies in solar, transportation, waste-to-energy and other sectors – all elements desperately needed to make smart cities a reality.

Thanks to the revived interest (and funding) the industry is experiencing, cleantech will likely begin popping up on our radars once again as more and more companies realize that their cleantech solutions can be smart city innovations.

The result will undoubtedly be a win-win-win situation for the startups looking to make a difference, the cities looking to be pioneers in their integration of smart innovation and the global community who will enjoy a smart, cleaner life.

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