Investment trends, market analysis
& authoritative Commentary
VC deal activity in the first half of 2023 exceeds the level reached in the first half of any year prior to 2021.
Deal value also grew 17.2 percent between Q1 and Q2 this year, indicating some buoyancy amid a moderate slowdown in the venture space. The climatetech and cleantech verticals continue to lead investment in the sector, and the manufacturing vertical, which plays a pivotal role in clean energy adoption by bridging innovation with impact, was the third busiest in the first half of 2023.
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CLIMATETECH
VC deal activity: Cleantech vertical
VC deal activity: Manufacturing vertical
The climatetech vertical continues to lead the sector in deal activity, with 673 deals representing $23.4 billion in value during the first half of 2023.
As companies reassess their operations to align with decarbonization goals and criticisms emerge around the true impact of carbon credits and “greenwashing,” opportunities for more impactful transformations at the manufacturing level have resulted.
Energy innovation continues to drive investment, with increasing impact from manufacturing gains.
Source: Pitchbook Geography: Global
As of JUNE 30, 2023
Climatetech VC deal activity
VC deal activity: Climatetech vertical
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Spotlight on Mobilitytech
The No. 2 vertical for deal activity, cleantech, saw 507 deals worth $11.3 billion during the first half of the year.
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& valuation trends
Bolstered by historic government funding initiatives, the manufacturing vertical was the third busiest in H1 2023, with 130 deals worth $2.9 billion.
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exit trends
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Investment Trends
& Macro Influences
“Other laws and regulations are based on voluntary incentives, but under the Renewable Fuel Standard, refiners have to ensure that their gasoline and diesel contain significant percentages of low-carbon renewable fuel. So it’s truly changed the industry by mandating the use of less carbon intensive technologies.”
Partner
Corporate
“Wall Street and Silicon Valley are increasingly looking at the nuclear space, and there’s a range of interest across the board as the investment community evaluates technologies and where their funds may be able to play.”
“To qualify for some tax credits or to take advantage of other federal incentive programs, a project must be in service within a matter of years, so big delays can’t be accommodated. This has created an ecosystem that is driving the growth of domestic manufacturing.”
David M. McCullough
Partner
Energy
Jeffrey S. Merrifield
Partner
Government Law & Strategies
Aimee P. Ghosh
Climatetech:
2022 Year in Review
Climatetech:
Venture Dealmaking & Cross-Border Trends
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“Prominent investors have claimed that the next wave of unicorns will be companies developing green hydrogen, climate-smart agriculture, green steel and green cement and that borders will not exist for such investments.”
Partner
Corporate
Stan Lewandowski
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