Kapsarc – Sectoral Clustering and Climate Tech Startup Financing Through

Tackling climate change requires the rapid development and deployment of climate-tech solutions that can mitigate emissions and adapt to the consequences of global warming. Startups are often at the forefront of disruptive innovations and the development of cutting-edge technologies. By backing early- and growth-stage startups, venture capital (VC) and private equity (PE) firms play pivotal roles in funding climate-tech startups. The paper investigates whether market conditions can explain the amount of financing of startups, revealing sectoral clustering in climate-tech sectors.