TLDR:
- Private capital is flowing towards climate finance but is unevenly spread, leaving a growth equity ‘missing middle.’
- A research report by CREO highlights the need for climate capital to seek growth equity funds to address this gap.
In a recent report by CREO, it was found that private capital has started flowing towards climate finance, but this capital is unevenly spread across strategies and sectors. The report highlights a gap in the market, specifically in the growth equity sector, which it refers to as the ‘missing middle.’
The report suggests that in order to address this gap, climate capital needs to seek out growth equity funds. By focusing on growth equity, investors can support emerging companies that have the potential to scale impactful climate solutions. This approach can help bridge the funding divide between early-stage startups and larger, more established companies in the climate finance sector.
CREO’s research emphasizes the importance of targeting growth equity funds as a key strategy to mobilize capital towards impactful climate solutions. By investing in this ‘missing middle,’ investors can help drive innovation and support the growth of companies that are at the forefront of addressing climate change.
