As rumors rumbled that the U.S. Federal Reserve would hike rates once more — and when it followed through earlier this week — another round of layoffs hit the tech sector. Stripe, Opendoor, Chime, Zillow, Cerebral, Brex, and of course Twitter, among others, have already cut or are about to eliminate thousands of jobs.
That’s bad news for employees today, but it might be good news for the climate in the near future.
Before we get too far, let me say up front that getting laid off is terrible and not something I wish to happen to anyone. Not knowing where your paychecks will come from or what benefits you’ll receive is difficult in the best of times, and it’s far worse when economic signs are mixed or major life changes are looming. I am not at all trying to minimize what people go through when they’ve been laid off. It’s happened to me, and it sucks.
But layoffs also offer a chance at a new beginning. Even before the recent waves of layoffs started washing over the tech industry, people were leaving their old jobs for new opportunities in climate tech.
While this is a TechCrunch+ story, we made sure the paywall is below the key links in case you are job-hunting. Hugs — The TC+ team
“One thing we’re seeing is really, really strong talent leaving larger companies,” Erin Price-Wright, a partner at Index Ventures, said at TechCrunch Disrupt, “because some of the financial upside for public tech companies or maybe even late-stage tech companies has sort of vaporized in the last few months. And people are like, ‘Well, I had these golden handcuffs, and that was preventing me from working on what I really care about. And I don’t have that anymore. So I’m going to take a risk and I’m going to do something.’”
Climate tech has been booming relative to the rest of the market, with startups in the sector raising $5.6 billion in the first half of this year, short of 2021’s crazy hauls but still well ahead of 2020, the next previous record, according to PitchBook. Five years from now, PitchBook expects the climate tech market to be worth $1.4 trillion, a compound annual growth rate of 8.8%.
All those companies are in desperate need of talent. Nearly every early-stage founder in the climate tech space I’ve spoken with in recent months went out of their way to mention that they’re hiring. Climatebase has thousands of jobs listed right now, and that’s just a portion of the climate tech companies with active listings.
Shaun Abrahamson, co-founder of climate-focused Third Sphere, pointed out that his firm’s portfolio companies are currently hiring for over 400 positions. Breakthrough Energy Ventures’ portfolio companies are hiring for nearly 1,200 positions.
Elsewhere, around 100 companies are using the climate career platform Terra.do to directly connect with applicants, chief business officer Nishant Mani told TechCrunch. The startup frequently runs virtual job fairs to match employees with employers, and business is booming. The platform’s user base is growing 50% month on month, and Mani is aiming to get 1,000 companies actively using the platform in the next six months.
That’s only half of it, too. Mani said many people sign up with the intention of founding a climate tech company. Terra.do has been running cohort-based programs that allow people to explore different aspects of climate change, mitigation and adaptation. Already several companies have emerged, including Phoenix Hydrogen, Climate Club and Waterplan, a Y Combinator alumnus. Collectively, they have raised nearly $25 million.
The rush of talent into climate tech has the potential to create a positive feedback loop, attracting more investment that leads to more jobs. At Disrupt, Price-Wright said that one of the key indicators her firm uses to direct their investments is which jobs people are leaving and where they’re going.
“One of the ways we thought about climate investing — and we have at this point a number of companies in our portfolio in the climate side — is actually following talent. One of the best ways to judge and evaluate a company is the quality of people that go there,” she said.
“Especially now with the weakening public markets, there’s an exodus of people who are looking for meaning, value and to create impact,” she added. “And we’re following right along.”
No sector is completely recession proof, despite what some may say, but it’s probably not going to shrink anytime soon. Given the magnitude of the climate crisis and investors’ appetite to rush into a growing market, it’s likely that we’re witnessing a shift in the tech world away from business- and advertising-focused software companies toward software and hard tech climate startups. As talent follows, it’s unlikely to drift back anytime soon.