Investment trends, market analysis
& authoritative Commentary
Driven by more diversified investment and high levels of mid-year dealmaking, Climatetech VC activity remained strong in 2023 as the sector consistently outperforms pre-2021 metrics.
The year’s momentum was concentrated in Q2 and Q3, which represented two-thirds of the $26.7 billion in total deal value, the third-highest annual figure on record. Deal sizes and valuations trended upward for climatetech startups across all maturity stages, with a few exceptions.
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CLIMATETECH
Share of climatetech VC deal value by stage
Share of climatetech VC deal count by select top verticals
More PE growth/expansion deals closed in 2023 compared to any year prior, underscoring a growing interest in climatetech plays among PE firms.
While mobilitytech dealmaking slowed amid widespread EV adoption, the manufacturing and LOHAS & wellness verticals remained strong. Buoyed by expanding renewable fuels innovation, the oil & gas vertical grew by nearly 23% after surpassing $1B in deal value for the first time in 2022.
Vertical trends within climatetech reveal shifting priorities for dealmakers.
Source: Pitchbook Geography: Global
As of DECEMBER 31, 2023
Climatetech VC deal activity
Climatetech PE growth deal activity
Explore 2021 subsector trends
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Spotlight on Mobilitytech
The late-stage VC category saw its median deal size grow by nearly one-third, exceeding $10M for the first time, while the early-stage category saw more measured growth of 13.4%.
Explore 2021 investment
& valuation trends
The manufacturing and LOHAS & wellness verticals have been resilient in a challenging market, with consistently rising deal counts since 2021 and more than $14B in deal value in 2023.
Explore 2021 climatetech
exit trends
Download Our Spotlight on Mobilitytech
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2023 Year in Review
“The manufacturing category continues to show resilience, which may be connected to increased interest among investors on the basis of the generous incentives accessible under the IRA.”
“The biggest challenge for innovators is trying to land in the middle of the three-part Venn diagram of what is a helpful technology, what is a commercially viable technology and what is a technology that can capture government benefits.”
Partner
Tax
Don Lonczak
Partner
Intellectual Property
Steven Tepera
Climatetech:
2022 Year in Review
Climatetech: Investment Trends
& Macro Influences
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VIEW THE REPORT
Partner
Corporate
Veronica T. Nunn
“As with all new legislation,
it takes time to clarify meaning and implementation, but that's an opportunity to assess
and understand long-term implications and align them with investment goals.”
“Companies that have developed expertise in extracting hydrocarbons from underground reservoirs can now reconfigure their operations to inject captured carbon into those sub-surface structures”
Partner
Energy
Gavin Watson
Emerging Growth & Venture Capital
Emerging Growth & Venture Capital