December 21, 2023

Climate tech in 2023: infrastructure, FOAKs and a group of prolific Swedes

The four largest deals in European tech this year all went to climate tech companies

Freya Pratty

3 min read

H2 Green Steel's site. Photo: H2 Green Steel

European climate tech saw fewer deals in 2023. But, arguably, more capital than ever before poured into the areas that could move the needle. 

It was the year that focus moved away from software-based solutions and things got physical. We charted the rise of the “infrastructure startup“ — a new breed of startup building tech with a physical footprint, be it gigafactories, biofuels or next-generation materials plants. 

Testament to the rise of this new category, the four largest deals in European tech across the board this year went to infrastructure companies. 


The rise of the infrastructure startup has also meant the mainstreaming of a new acronym, FOAK (“first-of-a-kind“), a stage where founders build the first physical version of their tech.  Working out how to finance FOAKs has been one of the central questions occupying the climate tech world in 2023.

The year in numbers

European climate tech brought in $18bn in 2023, according to Dealroom (as of December 12, 2023). That’s an 11% decrease on 2022’s $20.3bn. The number of deals has also fallen, from 1,600 in both 2021 and 2022 in Europe, to 1,400 this year.

That said, climate tech funding in Europe has proved more resilient than the global picture — where climate tech funding dipped 33% year-on-year. 

Compared to the wider tech market, climate tech has also proved relatively resilient (a 40% decrease in total European tech deals year-on-year in 2023). 

Data from PWC shows that climate tech now makes up 10% of all tech deals globally — a number that’s slowly crawled up from 1.5% over the last 10 years. 

The carbon funding gap

So is funding going to the right places? According to data from PWC, mobility solutions saw 45% of global climate tech funding in 2023 — while the mobility sector accounted for just 15% of global emissions. 

The industrial sector accounts for 34% of emissions — more than any other sector in the economy, according to figures from the Intergovernmental Panel on Climate Change (IPCC). 

This year, 14% of funding went to industry solutions, up from 8% in 2022, but still a gap given the sector’s share of emissions.

The year in deals

The largest deals of the year reflect the infrastructure trend. The biggest round went to Swedish fossil-free steel manufacturing company H2 Green Steel, which secured a €1.5bn round in September.

Northvolt, Europe’s largest battery manufacturer, secured the second largest, a $1.2bn round in August.


In 2022, Northvolt clinched the top spot as well. There was a notable decrease in the amount of consumer-facing climate tech companies bringing in large deals this year. In 2022, micromobility startup Bolt brought in the second-largest round at €628m and consumer electronics marketplace BackMarket also made the top 10, with a $510m Series E round.

Harald Mix, who helped to found both H2 and Northvolt, as well as Swedish energy storage company Polarium.
Harald Mix

Prolific Swedes

The two companies receiving the largest cheques of the year, H2 Green Steel and Northvolt, are both Swedish companies. They share similar cap tables — both are backed by, among others, Spotify founder Daniel Ek, investor Cristina Stenbeck and the IMAS foundation.

Both companies are also connected to one man who’s become somewhat of a rockstar in the European climate tech world: Harald Mix. He helped to found both H2 and Northvolt, as well as Swedish energy storage company Polarium.

Towards the end of this year, the latest Mix-connected company launched — heat pump startup Aira — meaning the Mix effect is likely to live on well into 2024.

Freya Pratty

Freya Pratty is a senior reporter at Sifted. She covers climate tech, writes our weekly Climate Tech newsletter and works on investigations. Follow her on X and LinkedIn