Solutions Insights - November - Clean Tech

Following on from our recent Deep-Tech deep dive, the NZTE Investment team is observing growing interest and seeing increasingly more early-stage companies within one of Deeptech’s largest sub-sector’s, CleanTech.

Globally, early-stage venture funding for CleanTech increased to $USD16.1bn in 2019 and is growing five times faster than the average investment in other sectors.

38% of New Zealand’s total early-stage capital funding in 2023 was attributed to DeepTech. Within this, 23% was assigned to CleanTech.

Chart 1: Early-stage investment in DeepTech by sub-sector in 2023 (source PWC)

The cleantech sector is recognised as being at an early stage of development locally and internationally, with the average age of local New Zealand companies being 6.8 years. One would expect in future, more capital raises and funding to be attributed to the CleanTech sector as companies mature and grow.

There are leading subsectors within CleanTech that NZTE are seeing new technologies emerge

NZTE are focused on waste to value, cleantech processes and solutions, and biofuels.

CleanTech as a sector:
The cleantech sector is a fast-growing global investment category encompassing technology companies focused on sustainability. These companies hope to transform industries that contribute to significant environmental challenges like waste, pollution, and climate change. Cleantech spans key industries, offering solutions for the energy transition, water purification, circular economy, waste management, transportation, and construction. With a predominantly B2B business model, many cleantech firms rely on advanced scientific or engineering innovations, positioning them as deep tech companies as well.

New Zealand's cleantech sector is poised to play a pivotal role in advancing technologies crucial for a sustainable world. Successful local companies not only contribute to global sustainability but also catalyse significant economic growth within the nation.

Chart 2: Cleantech investment by deal type (source Pitchbook)
Footnote 1: CleanTech investment data is sourced from Pitchbook and only includes only CleanTech investments across Seed, Early-Stage VC, Later-Stage VC and Growth/Expansion.

Chart 3: CleanTech cheque sizes in New Zealand (excludes outliers)
Footnote 2: CleanTech investment data is sourced from Pitchbook and includes the following verticals: B2B, B2C, Energy, Financial services, Healthcare, Information technology, Materials and resources.

CleanTech development - Technology Readiness Level and Adoption Readiness Level​:

Chart 4: TRL and ARL progression profiles

Cleantech companies typically move through the Technology Readiness Level (TRL) and Adoption Readiness Level (ARL) frameworks as they develop and bring their innovations to market. TRL assesses the maturity of a technology, starting from basic principles (TRL 1) to a fully operational system in a real-world environment (TRL 9).

Cleantech companies use the Technology Readiness Level (TRL) to define technology development progress. This acts as a useful tool for companies as different technologies may be in competition to capture a particular market segment. On the other hand, ARL evaluates the market's readiness to adopt the technology, progressing from identifying a need (ARL 1) to widespread adoption and becoming a market standard (ARL 8).

Early-stage cleantech companies often focus on advancing through mid-TRL levels (3-6) and early ARL stages (2-4), where they develop proofs of concept, engage stakeholders, and pilot their technologies.

Challenges for the NZ CleanTech ecosystem:

- Lack of investment: New Zealand CleanTech innovators are raising 95% less private investment than comparable SAEs. 

- Proximity to offshore markets: New Zealand CleanTech innovators are isolated from global customers and multinational corporations and investors, meaning they opportunities to collaborate, find and secure investment, or to export their products and services are missed due to the proximity of New Zealand to offshore markets.

- Collective growth: Successful government-backed New Zealand innovators have mostly received support on a one-by-one basis.  Comparable SAEs which experience greater growth in CleanTech have an intentional approach to lift an entire industry into export markets.


Success in New Zealand's cleantech sector can be driven by several key levers:

- Government Policy and Support: Clear climate policies, incentives, and grants are crucial for fostering innovation. New Zealand’s commitment to achieving net-zero emissions by 2050 provides a strong framework for cleantech development.

- Access to Capital: Investment is essential for early-stage cleantech companies to develop and scale their technologies. Encouraging both domestic and international investors to fund cleantech ventures will accelerate growth.

- Collaboration and Partnerships: Collaboration between cleantech companies, research institutions, and established industries can drive innovation. Partnerships can also facilitate the commercialization of new technologies and entry into global markets.

- Talent and Skill Development: Building a workforce skilled in science, technology, and engineering will support the growth of the cleantech sector. Continuous upskilling and attracting global talent can enhance the sector’s competitiveness.

We are committed to understand how NZTE can add value to this exciting sector, along with supporting the ecosystem around investment attraction.

See below if you are wanting to understand more about how Invest New Zealand can support you, be it on investing in a New Zealand business, our Active Investor Plus visa programme or our sectors of strength below.