Climate tech has a funding problem. Not because capital is missing, but because building industrial companies requires a very different mix of capital than the typical startup model is designed for.

In this episode of Leaders Shaping a Resilient Planet, Jarna Hyvönen, Co-Founder and CEO of Finnish biotech company Volare, joins our very own Andreas Munk Holm and co-host Carmel Rafaeli, Founding Partner at The Table, to explain what it actually takes to scale in this category.

Volare is building a scalable refining platform for food industry side streams. It uses the black soldier fly to upcycle waste into high-value outputs such as protein, oils and fertilisers for industries like aquafeed, pet food, agriculture and chemicals, all within a fully circular process. In 2025, it raised a €26 million round.

The first place where the traditional venture model breaks is in how companies are financed. Instead of raising equity first and layering in other instruments later, climate hardware companies must combine multiple financing sources from the outset, as Jarna explains.

In their case, this meant using loans, mezzanine, equity and grants together, illustrating how multiple instruments need to be deployed simultaneously rather than sequentially.

This is not just complexity for its own sake. Each component depends on the others. Volare’s CEO describes the structure as “like a house of cards,” where everything must come together at the same time because grants, equity and debt are all conditional on one another.

That dynamic fundamentally changes fundraising. Founders are not simply closing a round, but aligning multiple stakeholders across different instruments, each with their own constraints and timelines.

This level of interdependence means financial strategy cannot be deferred.

Jarna points out that companies in this space need “a CFO who’s super smart and understands a lot of different kinds of finance,” including startup funding and the different instruments involved, as well as how they fit together and affect future fundraises.

Another misconception is that climate innovation requires building everything from scratch.

Volare’s CEO takes a different view, stating clearly that “we are not reinventing the wheel,” but instead identifying where existing industrial processes can be adapted and where the company has a unique edge. This allows it to focus innovation where it adds value, while relying on proven systems elsewhere.

The result is reduced technical risk, but it requires clear communication to ensure this pragmatism is not seen as “just a processing innovation” rather than real innovation.

Execution discipline also shows up in how infrastructure is approached.

Rather than building new facilities from scratch, Volare opted to use an existing industrial site. As Jarna notes, constructing a new facility “would have added a year to the project just to build the walls,” highlighting both the time and cost saved by reusing infrastructure.

This reflects a broader principle. In climate hardware, strategic choices around infrastructure can significantly affect capital requirements and the speed of deployment.

At the same time, the market has shifted. Jarna emphasises that “it doesn’t make sense to build a business which would not have a business model that’s viable even without a sustainability premium,” reflecting a move away from narratives driven purely by impact.

While sustainability remains important, it is no longer sufficient on its own. As Jarna notes, products need to be something customers want for reasons beyond sustainability. Companies that have built for cost efficiency from the beginning are better positioned in this environment.

The transition from pilot to industrial scale marks a critical stage. At this point, as Jarna explains, once operations are running, “you can really look at the unit economics,” meaning that assumptions can be evaluated under real conditions. This is where the focus shifts towards understanding how the business performs in practice.

Across funding, execution and market realities, climate hardware operates under a different set of rules.

These companies cannot rely on a linear fundraising path or a single source of capital. They need to bring together multiple instruments, manage their interdependencies and align them within the same timeframe. At the same time, they must be deliberate about where they innovate, build on proven systems where possible and prioritise efficiency from the outset.

Ultimately, the ability to scale comes down to whether the business holds up under real operating conditions, where costs and performance can be measured in practice.

As this conversation makes clear, climate hardware requires a different playbook, grounded in execution, capital discipline and the ability to turn innovation into a viable industrial business.