BLOG Tech’s Greatest Returns Left Us a Trillion-Dollar Blueprint: Climate Tech Is Following It Line by Line

The same pattern has created generational wealth three times in 30 years. Montauk Climate is using this pattern to do it again.

The biggest returns in technology didn’t come from building computer hardware or internet cables — they came from the software and protocols that connected everything together. Companies like Google, Cisco, and Cloudflare created massive value by building the connective tissue of the internet.

We’re seeing the exact same pattern emerge in climate technology today. While the world is busy building solar panels, batteries, and charging stations, the real venture opportunity lies in connecting these pieces together. Just as software companies built fortunes by making the internet work seamlessly, the next wave of climate unicorns will build the systems that orchestrate our clean energy future.

This $11 trillion climate opportunity isn’t just about building more green infrastructure — it’s about making it all work together. At Montauk Climate, we’ve developed a framework called the Climate & Energy Transition (CET) Stack that shows us exactly where these high-return opportunities will emerge.

The CET Stack: A Three-Layer Framework for Climate Investing

1. Physical Layer: This foundational layer consists of the existing and imminent, tangible infrastructure needed for climate solutions — like renewable energy facilities, battery storage systems, electric vehicle chargers, and carbon capture technologies. It’s the bedrock of the future energy system.
2. Protocol Layer: Protocols are the language of technology — they allow different systems to interact, share data, and become more powerful together. In the CET Stack, this layer consists of smart grid standards, distributed ledger technologies for energy trading, AI for climate modeling, and other innovations that make infrastructure smarter and more efficient.
3. Application Layer: This is where it all comes together for the end-user — applications and services built on top of the physical and protocol layers that are consumer- and enterprise-facing. Think energy management software, carbon tracking apps, virtual power plants, and peer-to-peer energy trading solutions. These applications have high scalability, quick development cycles, and the potential to capture significant value.

Value Catalysts: Transformative Investments At The Points of Connection

Investors unlocked the internet’s value by funding protocols (like CloudFlare) and applications (like Google). We see analogous opportunities in climate tech. Our investment focus is on the protocol and application layers of The CET Stack — this is where we can create value in the interstitial spaces that bring infrastructure together and are high-margin opportunities that enable rapid growth. Essentially, the big players of the future won’t just build solar panels or battery storage; they’ll create the connective systems and applications that orchestrate the climate solution hardware.

At Montauk Climate, we’re positioning ourselves as the cornerstone of this transformation. We believe that value arises from connecting disparate elements, not just in building standalone technology. By focusing on the protocol and application layers, we’re looking at the key areas where network effects, scalability, and margins are table stakes.

Strategic Focus: Software, Enablement, and Finance

Software Solutions: We’re targeting energy management systems, AI-powered grid optimization, and software solutions that enable integration between renewable sources and the energy grid. Software drives scalability and efficiency, and we see tremendous opportunity in solutions that can orchestrate complex climate systems seamlessly.

Hardware-Light, Data-Driven Models: We’re interested in companies building efficient solutions without associated heavy infrastructure — leveraging data, APIs, and SaaS models to enhance climate adaptation and mitigation efforts.

Fintech and Captive Finance: The energy transition also requires financial innovation. Carbon credit trading platforms, green bond management, and climate-focused fintech are essential for scaling sustainable practices and creating new value propositions.

The Tech Playbook: Investing In Climate Innovation with Proven Strategies

The internet, mobile, and cloud revolutions teach us a simple but powerful lesson: transformative growth happens when infrastructure, standards, and applications come together in a cohesive stack. We believe the climate transition is no different. The CET Stack helps us identify where value will be created next — and position our investments where the ball is going, not where it’s been.

Climate investing isn’t just about finding the next gen solar panel or electric vehicle. It requires understanding the underlying systems that will drive the climate transition and investing in the connection points that will enable these systems to evolve and scale.

Drawing Historical Parallels to Inform Strategy

We’ve seen these patterns before: the rise of the internet, mobile ecosystems, and cloud services. Each transition showed how protocol and application layers generate outsized, traditional venture-style returns compared to infrastructure alone. We’re applying these lessons to climate tech by focusing on companies that orchestrate and optimize the climate transition.

To better understand where the value lies, we’ve drawn parallels with previous technology revolutions:

• The Rise of the Internet: We learned from investments in protocol layers like Cisco and application companies like Google that the value captured by protocols and software applications can be exponentially greater than infrastructure alone. The energy transition is poised to follow a similar trajectory, as key protocols in energy management and climate data exchange open up new pathways for integration and value creation.
• Mobile Revolution: Highlighting the power of app ecosystems and the value of data generated by mobile usage, we see a similar future in climate tech. Data is an asset, whether it’s tracking carbon footprints or optimizing grid performance, and investing in the platforms that generate, analyze, and monetize this data is central to our strategy.
• Cloud Computing: Just as cloud service providers enabled rapid software deployment and scalability, the CET Stack’s protocol layer enables climate technologies to operate and scale seamlessly. Whether it’s distributed ledgers for carbon accounting or AI-driven forecasting for energy management, investing in scalable, infrastructure-light solutions holds the key to substantial value creation.

Montauk Climate: Build The Future With Us

We’re not just another climate fund. Our approach is driven by a deep understanding of technological evolution, experience in operations, and application of these insights to the climate and energy transition sectors. By focusing on the protocol and application layers, we’re building a portfolio that connects and scales the climate tech ecosystem, with the goal of unlocking tremendous value for our investors and driving meaningful impact.

The climate challenge is vast, but so is the opportunity. With a strategic focus, the right framework, and a vision inspired by historic success, Montauk Climate is well-positioned to be a leader in the new era of climate tech investing.

If you’re interested in learning more about our approach or want to be part of this journey, we’d love to connect.

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