Clean-Tech Boom in U.S. Venture Capital: What Rajat Khare Sees and What It Means

Clean-Tech Boom in U.S. Venture Capital: What Rajat Khare Sees and What It Means

The climate imperative, policy shifts, and innovation in deep technologies are converging to make clean-technology (clean-tech) not just a moral or regulatory priority, but a major investment frontier. While Europe has historically led many climate-sensitive investments, the U.S. is emerging as a new center of gravity for venture capital in clean energy and climate tech. Rajat Khare, founder and CEO of Boundary Holding, has observed this shift closely. His insights reveal both tremendous opportunities and serious risks for investors, founders, and policymakers who want to engage in clean-tech sustainably.

Why the U.S. Is Pulling Ahead

Inflation Reduction Act (IRA) as a Game Changer

A central factor in the U.S. clean-tech surge is the Inflation Reduction Act (IRA). The legislation has unlocked approximately US$370 billion in public funding for clean energy initiatives. This includes prioritizing areas like electric vehicle (EV) production, battery manufacturing, and green hydrogen infrastructure. The IRA’s tax incentives, grants, and regulatory clarity are helping shift venture capital into sectors once considered too risky or long-term.

Decline in European VC & Reallocation of Capital

In 2023, venture capital flows in Europe saw a decline—driven by political uncertainty, economic pressures, and supply chain disruptions. Against that backdrop, U.S. clean-tech investments look relatively more stable and attractive. Rajat Khare notes that European dominance in climate-related VC is being challenged by U.S. policies and market dynamics. Investors, Rajat Khare says, are rethinking strategies and moving capital to where policy support and market incentives are stronger.

Key Clean-Tech Sectors Drawing Investor Attention

Here are some of the clean-tech domains that are especially benefiting from the U.S. investment surge:

• Electric Vehicles & Battery Technologies: With IRA incentives, battery manufacturing is becoming more viable. Declining costs, improvements in energy density, and increased scale are making EVs more attractive, even for regions outside traditional automotive hubs.

• Green Hydrogen: Seen as a potential solution for decarbonizing heavy industry and long-haul transportation, green hydrogen is rising in investor radar. The infrastructure and regulatory frameworks are being put in place, albeit with considerable financial and engineering risk.

• Renewables & Storage: Solar, wind, battery storage, grid modernization; these are benefiting directly from policy subsidies, improved tech, and increased demand for clean power. The ability to store intermittent renewable electricity is especially valuable. Investing.com