In Climate Salad’s 2025 Australian Climate Tech Industry Report, one investor we interviewed says that Australia “might be the best place in the world to be a climate innovator.”
As CEO and founder of Climate Salad — Australia’s most vibrant climate tech ecosystem that provides an active network for climate tech companies — I couldn’t agree more. And, as an investor and builder for the last 15 years in Australia and San Francisco, I’m telling you there’s an opportunity here.
Australia has a unique combination of factors that have made it a leader in sectors critical to climate. The country is an innovation powerhouse for the energy transition, climate adaptation and resilience. Our tech companies in energy storage, heavy industry and agriculture are some of the world’s most innovative. Because we’re in a smaller market with limited access to early-stage capital, they often have to do more with less, and so they are often efficient businesses at an earlier stage than you see elsewhere. If Australia’s tech companies could get access to the growth capital they need, they would have an outsized impact.
In the 2025 industry report we assessed the funding landscape for Australian climate startups, and found some interesting data points:
- Australia is under-invested compared to the rest of the world.
- Energy and food/land are leading, as expected given industry strengths.
- Unexpectedly, battery storage seems overlooked by investors, despite clear strengths.
Under-investment in Australia, combined with strong policy and regulatory tailwinds at the federal level, creates a unique opportunity for investors to add some geographic diversity to their impact portfolios.
Geography shapes climate innovation
Why should impact investors care about where innovation happens? There are the obvious geopolitical reasons: We all saw the impact of a global pandemic on supply chains. But beyond that, diverse innovation matters because different conditions produce different solutions. Innovation is a product of its whole context.
Everyone knows Australia is unique. Not everyone thinks about how some of its core natural and cultural attributes are also drivers of innovation, especially in climate solutions:
- Space and sunshine – lots of both
- Vast distances and remote cities and towns
- Indigenous knowledge that goes back 60,000 years at least
Australia also has:
- The world’s longest grid (the National Electricity Market – all 5,000 km of it) and the world’s largest completely isolated grid, in Western Australia (yep, bigger and more isolated than Texas’s ERCOT)
- The world’s most automated mining operations and world-leading mining decarbonization efforts
- A huge amount of distributed energy on the grid: One in three Aussie homes has rooftop solar, and residential batteries are being installed at the rate of more than 1,000 per day.
The institutions behind the innovation
By luck, hard work and design, Australia’s unique environment has grown a set of problem-solving superpowers. Australia’s universities are powerhouses of R&D. There’s exceptional depth of expertise in industries critical to climate. A history of strong public-private partnerships has helped drive innovation, and federal climate policy is creating regulatory certainty for companies.
Australia has produced some of the world’s most important technologies. The PERC cell used in around 75% of all solar installations was invented in 1983 at the University of New South Wales. This year, another team at the university set the efficiency record for an emerging solar cell material. Beyond solar, Australia’s innovators also brought you wifi, Google maps, Canva and JIRA.
Supporting an ecosystem of more than 700 climate startups, I see Australian innovation in action daily. Founders with deep industry knowledge are creating solutions to hard problems and making those products better and cheaper than more carbon-intensive alternatives. For example, Regrow, founded in Australia and now headquartered in Los Angeles, is reducing fertilizer waste and optimizing global supply chains for agriculture. Bearhug is producing an alternative to plastic wrap for pallets, starting with beer (a mark of a true Australian.)
We have founders with unparalleled domain expertise. They understand climate challenges that other markets have yet to confront, and they live in a country where emissions reduction is a baked-in mindset. It’s a small market, so Australian founders have to have an international outlook if they want to scale. And our closest markets are Southeast and South Asia, where emissions are high, and decarbonization impact can be disproportionately large. Add to that the fact that Australia’s VC sector is relatively less mature than other places, and you have amazing founders who have had to be incredibly scrappy and capital-efficient in order to succeed.
At a time when policy, regulation and public-private partnerships in the US are uncertain, impact investors are looking at other markets. Australia should be one of them.
Australian startups need patient, catalytic capital. These dollars can have an outsized impact, both in Australia and in the markets it serves. Australia’s capital stack is maturing; there’s money there, but deployment is not well coordinated. Right now, there’s an opportunity for US philanthropic capital and impact investors to play a role. That’s why Climate Salad is stepping up and investing directly into some of the most exciting startups in this space. If you’re interested in learning more, review our industry report or get in touch.
Mick Liubinskas is the CEO of Climate Salad.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
