Green Capital Is Becoming More Selective
Green startups are no longer just about environmentally oriented ideas or social responsibility. Globally, the climate-tech sector is developing into an increasingly large investment market, directly linked to the demand for energy transition, emissions reduction, and efficient resource use.
According to Net Zero Insights’ State of Climate Tech Q3 2026 report, equity investment in climate-tech companies reached USD 15.8 billion, up 17% from the previous quarter. However, the number of deals fell to just 686, the lowest level since 2021. Notably, firm energy, including fusion, nuclear power, geothermal energy, and energy storage, attracted approximately USD 6.3 billion.
This development shows that capital is not moving away from green technology, but is increasingly concentrating on sectors with clear market demand, deployment potential, and commercialization prospects. Investors are becoming more cautious about ideas that focus solely on environmental impact commitments without a sustainable revenue model.
One notable approach is turning waste into resources. According to the World Resources Institute (WRI), some international startups are using agricultural by-products, nutshells, and sewage sludge to develop long-term carbon storage solutions, thereby creating tradable carbon credit products. This model demonstrates that economic value can be generated from resources that were once considered waste.
Assoc. Prof. Dr. Pham Thi Tuyet, Vice Rector of the Banking Staff Training School, said: “Startups and SMEs need to position their green projects in line with national standards and integrate ESG into their business models. This will provide banks with a basis for granting green loans to businesses.”
Vietnam Has Significant Growth Potential
Vu Kim Hanh, Director of the BSA Center, commented: “The green startup community is very vibrant, flexible, and constantly innovative. They are eager to learn and passionate about sharing. Only young people are curious enough to experiment, innovate, combine ideas, and share their successes with one another. This is a community that still has a long way to go, and every step they take will help further develop Vietnam’s agriculture.”
The Vietnam Climate-Tech Startup Investment Ecosystem Report 2025 (CT-FE 2025) states that, during the 2015–2024 period, 78 climate-tech companies raised nearly USD 205 million through 217 deals. In 2024 alone, investment reached nearly USD 100 million, accounting for 22.3% of total domestic venture capital investment.
However, the investment landscape remains uneven. A single deal worth USD 70 million accounted for as much as 71% of total climate-tech investment in 2024. The proportion of companies progressing beyond the post-seed stage was just 11.11%, significantly lower than the 32.2% recorded across the technology sector as a whole.
These figures reflect the gap between the potential of green startups and their capacity to develop the market. Many businesses have technological solutions but face difficulties in testing, product refinement, customer acquisition, and scaling up. A particular characteristic of climate-tech is that development cycles can be lengthy, requiring substantial investment and the involvement of manufacturing partners, regulatory authorities, and investors.
Nevertheless, the scope for development is considerable. Agriculture, renewable energy, waste management, new materials, energy efficiency, and green transport are all sectors in which Vietnam has clear demand for transformation. These are also challenges that businesses can address on a small scale, gradually demonstrating their effectiveness before expanding.
Turning Ideas into Business Models
Net Zero Challenge 2026 offers total prize money of VND 15 billion for solutions in three areas: renewable energy and carbon removal; food systems and sustainable agriculture; and the circular economy and waste management. Its participation requirements also place emphasis on a minimum viable product (MVP), a pilot implementation plan in Vietnam, and a commercialization strategy.
Alongside this, the Climate Tech Catalyst program, jointly implemented by the Ministry of Finance, KOICA, and the Global Green Growth Institute (GGGI), aims to support startups and small and medium-sized enterprises in agriculture, the circular economy, waste management, renewable energy, and transportation. The program connects businesses with experts, market partners, and international investors.
For Vietnamese startups, rather than pursuing capital-intensive technologies such as direct air carbon capture or the development of next-generation energy sources, they can start with challenges more closely aligned with domestic strengths: agricultural by-product processing, waste recycling, energy efficiency in factories, irrigation system optimization, emissions management, and traceability.
In particular, businesses can develop B2B business models, providing solutions to factories, industrial parks, cooperatives, and export businesses. When customers can see tangible benefits through reduced energy costs, more efficient use of raw materials, or compliance with environmental requirements in import markets, green products will have a basis for scaling up.
(Source: Business Forum Magazine)
