TLDR

According to Merlin Piscitelli, CRO EMEA at Datasite, cleantech venture capital investment in the worst post-COVID year was better than the best pre-COVID year. He predicts increased energy, cleantech, and ClimateTech M&A driven by new business models and policies. Factors such as interest rate increases, geopolitical tensions, and shifts in investor sentiment affected energy investment and M&A activity in 2023. However, the introduction of new business models, policies, and a decline in certain finance structures are likely to spark more activity. Recent energy M&A deals worth a total of $135 billion show that large producers are working to secure lower-cost reserves. This trend is likely to continue and trickle down to smaller markets. Additionally, as more renewable exits are expected, some investors are shifting their focus back to cheaper energy production.

Both buy-side and sell-side energy and power industry deal kickoffs on Datasite have increased year-over-year, showing increased demand and policy support for the transition from fossil fuels to renewable energy sources. Climate tech and cleantech VC deal activity in the US nearly doubled between 2019 and 2021, and this trend is likely to continue. Energy special purpose acquisition companies (SPACs) will continue to decline, and companies will focus on energy storage and grid solutions as top investment areas this year. The Ukraine-Russia war and concerns around non-renewable energy security may also prompt more investment in renewable and sustainable energy storage and grid solutions.