TLDR:
Climate tech fundraising remains steady according to the Silicon Valley Bank’s annual report. Despite an overall decline in VC fundraising, climate tech is only 14% below 2021 results. The report highlights the resilience of the sector and the long-term tailwinds behind climate tech.
Summary:
According to the Silicon Valley Bank’s annual Climate Tech Report, climate tech fundraising has remained steady despite a 24% decline in overall VC fundraising and deal activity in 2023. The report indicates that climate tech is only 14% below 2021 results, with subsectors like carbon tech and climate data showing signs of growth. SVB’s national head of Climate Technology and Sustainability practice, Dan Baldi, emphasized the ongoing support and investment in climate technology solutions due to the increasing presence of climate risks.
The 2024 Future of Climate Tech Report provides insights into the outlook on climate tech and the broader innovation economy. Some key findings include:
- Climate tech fundraising remains resilient, settling at a level similar to 2020 despite an overall decline in VC funding.
- Companies in the sector are running low on cash, with 60% having less than 12 months of cash runway.
- About 88% of global carbon emissions are now covered by a net-zero goal, indicating long-term tailwinds behind climate tech.
The report also outlines four themes shaping the future of climate technology, including the importance of incentives, the focus on hard-to-mitigate emissions, and the expectations for exit activity in the sector. Despite challenges such as declining invested capital, the report suggests that climate tech is positioned for growth as a necessity in addressing climate risks.
