Start-up incubators drive Europe’s cleantech ventures

Europe is increasingly becoming a major global hub for cleantech expertise and innovation, a feat in large part down to the development of specialised incubators, incentives and programmes launched by regional states. As more US and Asian VC firms pour institutional financing into the region, business transfer agents are helping more cleantech start-ups to make a successful transition from a small incubatory state to a successful exit.

Europe’s successful cleantech incubator programme is playing a growing role in the region’s emergence as a powerful launch platform for start-ups. The investment rationale in such projects is two-fold: to ultimately see both economic and environmental returns. The EU is realising the necessity of retaining its competitive advantage as globalisation is opening up more economic segments worldwide. Cleantech is one market the body has identified as a major area of future potential.

One such incubator is Climate-KIC, a European Commission-funded programme that supports environment-focused tech start-ups at universities. The incubator aims to welcome budding entrepreneurs and develop their innovative tech ideas to the point where investors would feel comfortable investing significant sums into the business. The incubator is one of around 70 active in Europe, which function by renting space to young start-ups that house other budding businesses and offer access to business-insiders that can help with finances, scientists that help with technical aspects and a network of contacts that include suppliers and investors. Climate-KIC’s sites include Imperial College in London, the Paris Institute of Technology and the Technical University of Berlin.

Europe differs from the dominant US market for cleantech ventures, in that the region never experienced the investment frenzy in the segment which ended up tailing off significantly by 2013. Most start-ups in Europe remain heavily dependent on state financing and the numbers are not as large as in the US, where hundreds of companies can compete for financing. European entrepreneurs are more risk-averse and typically take a longer time before bringing a product to market.

The Danish government’s commitment to renewable energy, especially in the manufacture of wind energy, has helped Copenhagen become an important hub of new cleantech activity. The Technical University of Denmark provides sophisticated testing and demonstration facilities to try out new energy technologies for the city’s Green Entrepreneur House incubator. The programme is backed by over €2 million in government funds. In the UK, the Carbon Trust works with over 300 start-ups across Europe with support from the European Commission, the British government and General Electric. In Finland, strong state and academic support for energy-efficient technologies has driven a buoyant local cleantech scene.  

While ideas and personnel remain key in bringing new cleantech products from Europe, incubators remain a vital platform for their launch. Developing raw ideas into something presentable and ensuring it becomes a product a sell business can help market to acquirers and financiers is the primary objective of these important programmes.

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