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In the footsteps of Silicon Valley: Estonian sustainability tech is taking off

Impact investors Joel Larsson and Seth Bannon took the stage at Latitude59, Estonia’s flagship tech conference, to bridge the funding gap in climate tech and inspire the world to keep pushing towards purpose.

Sustainable investing is on the rise – globally, assets under management shot up from $30.7 trillion in 2018 to $35.3 trillion in 2020.

But access to funding in the impact space is extremely uneven, says Joel Larsson, General Partner at Pale Blue Dot, a climate tech VC investing in pre-seed and seed-stage startups solving the climate crisis through technology. Larsson, a software engineer turned startup founder, has spent the last years investing in startups solving important global problems.

What the world desperately needs, he believes, is more diversity in climate tech. Today, 90% of the funding in the impact space goes to white men in a handful of cities. For climate tech to have the kind of impact needed, however, this needs to change. “Access to funding is concentrated in specific regions,” Larsson says. “But the problems we’re solving are worldwide. A lot of venture money is going into things that will make the climate worse. That I have a problem with.”

As part of his mission to spread climate tech investments more evenly around this dangerously heating globe of ours, Joel took the stage at Latitude59 in Tallinn. A long-time admirer-from-afar of the Estonian tech scene, he is now making connections on the ground. “My responsibility is to be present and meet founders in as many places as possible, and I’m meeting a lot of companies while I’m here.”

And Estonia’s sustainability tech scene is brimming with potential. Seth Bannon, Founding Partner at Fifty Years, has seeded a bevy of startups shaping the world for the better. As one of Estonia’s first 1,000 e-Residents, Bannon has a longstanding relationship with the country and believes the future is bright for the sustainability tech scene in the land of unicorns.

Seth Bannon

“Most ecosystems need to go through one generation of success in ‘normal’ business, to lay the foundation for building really important companies,” he says. “Often that’s driven by entrepreneurs that build companies, make billions, and then feel unfulfilled because they weren’t doing something important. We’ve seen this in Silicon Valley, where the first generation was just about making money. Now there’s a growing minority thinking about business in terms of impact. Estonia has now had that first wave of success, and over the next five years, this space will be pretty exciting here.”

Speaking at Latitude59, Bannon, whose firm’s investments include companies like Solugen, which is working on decarbonising the chemicals industry to produce industrial chemicals sustainably, made a compelling business case for not sacrificing purpose for profit.

“There’s actually a really good self-interested argument to be made for greener investing,” Bannon says. “There’s a misconception that solving fundamental problems is necessarily going to take longer. I think that’s just not the case. To solve a really big problem, yes, it takes a long time. But can you create and capture tremendous value along the way? Yes.”

If you’re ready to make smarter and greener investments, use our brand new comparison tool to see how investment opportunities in Estonia measure up to other European countries.

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