A Tale of Five Cities
On May 11, we co-hosted the Canadian Climate Capital Summit, one of the largest gatherings of climate-focused capital allocators in Canadian history.
Alongside the many large Canadian allocators in attendance and startup founder presenters, we had global representation from the US, Europe, Middle East and Asia. We’ve also been on the road plenty over the last several weeks including Bilbao for Energy Tech Summit, San Francisco for Climate Week, Halifax for CVCA and Toronto for … another Climate Week! Our Summit, coupled with these events reinforced several things we’ve talked about in the past, but also shed light on some new insights worth sharing.
What’s reinforced:
Global megatrends (AI, Energy Transition and Security, Resource Weaponization & Supply Chain Resilience) and how these trends are leading to exciting growth for climate positive companies
The rise of “dual-use” and the need for solutions that apply to civilian applications and defence, sovereignty and domestic production
The need for funds to demonstrate real outcomes and money back in investors pockets
New insights:
Where Canada sits on the global stage–its structural challenges and asymmetric upside
Exceptional growth stories from talented founders with ‘boring’ solutions
Large institutions rethinking where capital is best placed
At our Climate Capital Summit, keynote speaker Matthew Griffin mapped out megatrends that are accelerating and reshaping every industry: artificial intelligence, energy transition, resource weaponization and supply chain resilience. His message underscored the powerful momentum driving Canada's market. Following Matthew, we saw 10 venture-backed companies across Canada, many of which have surpassed $100M in contracted revenue run rate, that align with these megatrends and continue to build undeniable momentum. We also learned that Canada is home to 20% of the largest climate tech exits globally.
This dovetails into another trend we heard while in Bilbao that was reinforced during Web Summit. As European allocators look to move capital away from the US for a myriad of reasons, Canada is emerging as an interesting entry point to the North American market. We heard about the quality of Canadian entrepreneurship, strong underlying data about talent being driven to the Canadian market in search of political stability (Canada outpaced the US in recent tech talent growth, with 5.9% growth versus 1.1% in the US) and the opportunity for Canadian startups to serve as a valuable access point to customers across North America with less volatility and political risk.
We also heard allocators on the credit side discuss how AI is disrupting the way they look at credit (spoiler alert: it benefits business models most aligned with climate technologies we’re backing!). As credit providers grow wary of the impact AI will have on SaaS, they’re looking at new underwriting strategies to support lending to new business models: AI-enabled services, hardware and energy infrastructure. They’re not doing this out of charity or for emissions reduction, they’re doing it because more credit providers are making strong reliable returns in these categories.
The current sentiment around climate is not positive for many. Capital is rapidly rotating toward AI and defence, and many funds have retreated from the space. What our time on the road demonstrated is that the gap between the perception and what's actually being built is significant, and the opportunities in climate are paying dividends.
A huge thank you to our sponsors Fort Capital Partners, Carta, Osler, McCarthy Tetreault, RBCx, MNP, InBC and Telus for making the Canadian Climate Capital Summit possible.
