Soaring energy prices following the onset of the war in Ukraine have added fresh incentives for a global transition to carbon-free energy, even as nations look to secure fossil fuel resources in the near term.
Climate tech startups focused on tracking, eliminating and reversing carbon dioxide emissions have been further bolstered by corporate and regulatory actors.
The SEC has proposed rules that would require publicly traded companies to disclose climate risks. Stripe, Alphabet, Meta, Shopify and McKinsey launched a $925 million carbon removal fund dedicated to purchasing offsets in April, a significant step toward demonstrating market support for nascent technologies.
The market map below outlines the global climate tech VC ecosystem. Explore the carbon tech segment by clicking on the green tile.
Climate tech startups focused on tracking, eliminating and reversing carbon dioxide emissions have been further bolstered by corporate and regulatory actors.
The SEC has proposed rules that would require publicly traded companies to disclose climate risks. Stripe, Alphabet, Meta, Shopify and McKinsey launched a $925 million carbon removal fund dedicated to purchasing offsets in April, a significant step toward demonstrating market support for nascent technologies.
The market map below outlines the global climate tech VC ecosystem. Explore the carbon tech segment by clicking on the green tile.
To go deeper, read our Q1 2022 Climate Tech Report. PitchBook subscribers can also explore the full climate tech market map with details on more than 2,700 companies.
Spotlight: Carbon tech
Carbon tech companies fall into five subsegments:- Carbon fintech and consumer: Software applications, platforms and banking services designed to reduce greenhouse gas emissions.
- Carbon capture and storage: The removal of CO2 from emissions sources or the air that is then stored, frequently underground.
- Carbon sequestration: Short or long-term hiding of carbon somewhere other than the atmosphere, such as in the ground, soil, biochar or ocean minerals.
- Carbon accounting: Software platforms for measuring greenhouse gas emissions.
- Carbon utilization: Solutions that put captured CO2 to use in products that add value.
The most valuable VC-backed company in the carbon tech space is Crusoe Energy Systems, last valued at $1.75 billion. The company eliminates flared methane by using the waste energy to power cloud computing centers.
Carbon accounting platforms have also become popular targets for VC backing as corporations prepare for more stringent reporting requirements in the US and elsewhere. One such company, Watershed raised $70 million at a $1 billion valuation in February.
How climate tech deals and exits are trending
Climate tech deal activity remained elevated in Q1 2022 with 273 VC-backed companies raising a combined $9 billion following standout performance in 2021. Companies in the category raised an average 283 rounds and $11.2 billion per quarter last year.
Notable deals from Q1 included a $400 million Series E for indoor farming startup Plenty, $387 million for cultured meat creator Upside Foods, and $375 million for home solar company Palmetto.
Exit activity in the climate tech segment declined sharply in Q1, mirroring a trend seen across the VC landscape that has been driven by stock market volatility. A total of 22 exits were consummated at a combined value of $6.4 billion in Q1.
Battery maker SES scored the largest exit of the quarter with a SPAC deal that valued it at about $3 billion pre-money. Tritium, the maker of fast-charging hardware for electric vehicles, was valued at $1.2 billion in its SPAC deal.
More market maps:
Featured image by LuckyBusiness/Getty Images
Tags:
Join the more than 1.5 million industry professionals who get our daily newsletter!
Comments:
Thanks for commenting
Our team will review your remarks prior to publishing.
Please check back soon to see them live.