Accelerating climate-mitigating technology, or climate-tech, innovation in the formative phase of the technology life cycle is crucial to meeting climate policy goals. During this period, firms create value across a broad set of products related to hardware, software, and services. We conceptualize this as a nascent value chain, operationalize this concept by identifying a set of product clusters, and explore the patterns of innovation within and across them. Specifically, we analyze 14 climate-tech sectors using a dataset of 12 929 early-stage private investments in 3662 North American firms between 2006 and 2021. Descriptions of these firms reveal that innovation occurs in five distinct product clusters across the value chain. Within this dataset, only 15% of firms develop end products (i.e., downstream products bought by consumers), while 59% support these end products through components, manufacturing processes, or optimization products, and 26% develop business services. The temporal evolution of investments in these product clusters reveals three patterns of innovation among climate-tech sectors: maturing innovation (e.g., energy efficiency), characterized by coalescence around the dominant design of an end product with an increasing share of investments in optimization and services; ongoing innovation (e.g., energy storage), characterized by multiple waves of investments in evolving products enabled by flexible policy frameworks; and emerging innovation (e.g., agriculture), characterized by recent growth in investments across most product clusters and spillovers from other sectors. These patterns of innovation indicate ways that firms can add value to new climate-tech as it develops from the formative phase to the growth phase. An understanding of nascent value chains can inform policy design that supports climate-tech scaling by identifying underfunded product clusters and supporting development of a full value chain rather than only end products.

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