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Investment in impact companies globally decreasing

7 November 2023

Impact startups have raised over $41B in 2023 so far, a projected 36% drop from 2022 levels. This means that there is a strong global slowdown in VC funding for companies involved in climate tech, renewable energy, circularity and social justice. These alarming figures can be found in the report “Impact Startups 2023” , presented today at ImpactFest by and ImpactCity.

A global decrease of impact investments is especially worrying because none of the 17 Sustainable Development Goals (SDG) as formulated by the United Nations (UN) are on-track to be achieved by 2030. This should be a concern in the run-up to the United Nations Climate Change conference at the end of November in Dubai.

ImpactFest: working on solutions

The disturbing findings of this study were presented at ImpactFest, Europe’s leading impact event, where impact makers worldwide work to create solutions for a better world. Contrary to the report, ImpactFest shows that investors are indeed interested in investing in social and sustainable businesses: 12 impact investors are pitching on stage to find the perfect match with an impact company. Furthermore, ImpactFest presents sustainable new business forms like Steward Ownership and B Corp Certification.

Climate tech and affordable energy dominates

If we dive a little deeper into the figures of ‘Impact Startups 2023’, we see that climate tech and affordable energy are still the most funded SDG’s. Startups addressing people related UN SDGs are underfunded. Like the rest of the SDG funding, Climate tech VC funding is down 35% from last year, but private equity, project finance, and debt are filling the gap. Renewable energy startups raised almost $4B of VC funding this year, which is only a slight decline from 2021-2022. Solar widely leads attracting 84% of all VC funding in the last three years.

Regional figures: a long way for climate justice

Dealroom’s Impact Database also reveals that Europe has surpassed the US as top funder of Impact startups this year and is proving much more resilient in the downturn. The Netherlands over-index on impact compared to the European average.

Low and middle income countries are attracting a minimal 5% share of global impact funding, despite housing over 50% of the global population and being the most exposed to climate change impacts. Still very few climate focused funds establish themselves in low-income countries.

Over het rapport

The report, Impact Startups 2023, bases its findings on the Impact database, which gathers information on more than 17,000 “impact startups”. ImpactCity and founded this impact database with other partners to measure the development of the worldwide impact ecosystem. Impact startups are defined as companies that address one or more UN Sustainable Development Goal (SDGs) at the core of their business and have the potential to scale.


ImpactCity summarised the report in a handheld leaflet, which was distributed to visitors at ImpactFest.

Read the full report