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Climate tech might be the fastest-growing vertical in European tech, but it’s still getting started in central and eastern Europe. 

Climate tech investment has swayed up and down in the region, reaching a record of $382m in 2021 on the back of a massive round by Lithuanian-founded secondhand fashion marketplace Vinted. The company — which gave Lithuania its first $1bn-valued tech company in 2019 — raised a €250m round led by EQT Growth. 

Sifted could only confirm one climate tech round so far in the region this year; a €37.6m extension of Skeleton Technologies’s Series D. The Estonian startup is developing ultracapacitors, a type of energy storage that can be charged quickly and release energy quickly. 

So what’s holding the region back?

“We are definitely earlier in the process when it comes to the development of the market, but this is not a thing only in tech, but for most markets,” says Karolina Wojtas, investment manager at ICOS Capital Management. But she adds that the kinds of companies coming out of the region in climate tech, in areas like mobility and data, are similar to those she sees in western Europe. 

Wojtas says that a lack of networks is hindering the region’s founders, citing the fact that accelerators and startup competitions she has spoken with struggle to attract applications from CEE. 

“We need to make sure that [founders] are building connections and then through that have better access to funding and other opportunities.” 

Michal Miszulowicz, head of startup and scaleup expertise at BNP Paribas Bank Polska in Warsaw, says commercialisation is key to accelerating growth in the ecosystem. 

“Cleantech and climate tech are nothing without the industry in which they’re working,” he says. “You need a partnership with big companies active in many markets. One way to do this is corporate incubator or accelerator partnerships with VCs or international programmes.” 

He also says government incentives for companies to invest in green technologies are key. 

Eleanor Warnock is Sifted’s deputy editor and cohost of The Sifted Podcast (listen on Spotify or Apple). She tweets from @misssaxbys 

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