Climate Tech
Market Map: Carbon capture takes off
April 13, 2023
Climate tech has had a rocky couple of quarters.
The first quarter of 2023 closed with a 36% decline in total VC deal value globally from the previous quarter, suggesting a slowdown has come for green startups.
But there are still plenty of reasons for optimism. The US Inflation Reduction Act has stoked a fire for new climate investment. Startups in carbon tech are likely to benefit heavily from the legislation's suite of subsidies, including a tax credit for companies that use carbon capture and storage technologies. Even without this legislation, VC investment in carbon capture technologies has soared in the past two years.
PitchBook's latest market map brings together the many facets of climate tech. Click on the blue tile in the market map below to explore the startup world of carbon technologies.
To go deeper, read our Q4 2022 Carbon & Emissions Tech Report. PitchBook clients can also explore the full market map with details on more than 1,500 companies.
Direct air capture exploded onto the climate tech scene in 2022.
Climeworks, a pioneer of direct air capture technology, has dominated the landscape since its founding in 2009. In April 2022, it closed a $634 million Series F led by Partners Group and Singaporean sovereign wealth fund GIC.
Within the carbon tech segment, Generate, a sustainable infrastructure investment platform, still takes the cake for the highest total capital raised to date, with $4.46 billion.
Carbon and emissions startup investments remained resilient through 2022, with a combined $13.8 billion raised across 734 deals. Some of the top investors in climate tech over the past five years have been SOSV, Prelude Ventures and Cycle Capital Management.
Notable deals from Q4 included Solugen's $200 million Series D raise led by Kinnevik, Lowercarbon Capital and Refactor Capital, and RoadRunner Recycling's $90 million raise.
Exits in carbon and emissions tech dropped off in 2022, in line with market trends, falling from $5.7 billion in value across 21 exits to $1.7 billion.
LanzaTech, which recycles carbon emissions into new products, closed a $2.2 billion SPAC deal in March 2022, the largest exit of the year for climate tech.
The first quarter of 2023 closed with a 36% decline in total VC deal value globally from the previous quarter, suggesting a slowdown has come for green startups.
But there are still plenty of reasons for optimism. The US Inflation Reduction Act has stoked a fire for new climate investment. Startups in carbon tech are likely to benefit heavily from the legislation's suite of subsidies, including a tax credit for companies that use carbon capture and storage technologies. Even without this legislation, VC investment in carbon capture technologies has soared in the past two years.
PitchBook's latest market map brings together the many facets of climate tech. Click on the blue tile in the market map below to explore the startup world of carbon technologies.
To go deeper, read our Q4 2022 Carbon & Emissions Tech Report. PitchBook clients can also explore the full market map with details on more than 1,500 companies.
Spotlight: Carbon tech
Carbon tech startups pulled in $13.8 billion in VC deals in 2022 across six segments:- Carbon fintech and consumer: Fintech startups, SaaS companies and online banks with a climate focus.
- Biological carbon removal: Carbon storage in natural environments, such as trees, soils and aquatic environments.
- Direct air capture: Technologies that directly remove carbon dioxide from the atmosphere.
- Point-source carbon capture: Technologies that capture carbon dioxide at its point of emission from industrial plants.
- Carbon accounting and analytics: Data platforms that track and analyze greenhouse gas emissions.
- Carbon utilization: The process of deploying captured carbon into value-add products.
Direct air capture exploded onto the climate tech scene in 2022.
Climeworks, a pioneer of direct air capture technology, has dominated the landscape since its founding in 2009. In April 2022, it closed a $634 million Series F led by Partners Group and Singaporean sovereign wealth fund GIC.
Within the carbon tech segment, Generate, a sustainable infrastructure investment platform, still takes the cake for the highest total capital raised to date, with $4.46 billion.
Carbon and emissions startup investments remained resilient through 2022, with a combined $13.8 billion raised across 734 deals. Some of the top investors in climate tech over the past five years have been SOSV, Prelude Ventures and Cycle Capital Management.
Notable deals from Q4 included Solugen's $200 million Series D raise led by Kinnevik, Lowercarbon Capital and Refactor Capital, and RoadRunner Recycling's $90 million raise.
Exits in carbon and emissions tech dropped off in 2022, in line with market trends, falling from $5.7 billion in value across 21 exits to $1.7 billion.
LanzaTech, which recycles carbon emissions into new products, closed a $2.2 billion SPAC deal in March 2022, the largest exit of the year for climate tech.
Featured image by Kendall Anderson/ShutterstockMore market maps:
Fintech
Agtech
Infosec
Supply chain
Internet of things
Artificial intelligence and machine learning
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