A PwC report highlights reveals that investment in companies developing technology to combat climate crisis, climate-tech grew to $87.5 billion in the year ending up to June 30. This is up 210% on the $24.8 billion that was invested in climate tech in the same period the year before.
The State of Climate Tech 2021 report, which focused on solar power; wind power; food waste technology; green hydrogen production; and alternate foods/low greenhouse gas proteins, states that 14 cents of every venture capital dollar now goes to climate tech.
Emma Cox, global climate leader at PwC UK, in a statement said innovation is critical to meeting the challenges and the good news is that climate-tech investment is up significantly across the board.
“However, our research has found there is potential to better channel and incentivize investment in technology areas that have the greatest future emissions reduction potential. This raises the question of why these sectors are missing out, are investors missing a value opportunity or is there an incentive problem that needs the attention of policy makers?”
PwC said the lion’s share of climate tech funding – $58 billion went to mobility and transportation companies, including companies focused on EVs, e-scooters and flying taxis. “The average size of climate tech deal almost quadrupled to $96 million in the first half of 2021, up from $27 million one year prior. The number of active climate tech investors rose from less than 900 in the first half of 2020 to over 1,600 in the first half of 2021.”
Despite overall growth, the report highlights that the number of early stage, seed and series A investments in climate tech has remained largely stagnant since 2018. As such, PwC says there’s a need to fund more young climate tech start-ups that have the potential to become companies worth $1 billion or even $10 billion.
US climate-tech companies, in terms of geography, are attracting the most venture capital funding with $56.5 billion going to start-ups in the country in the year leading to June 30. Chinese climate-tech companies raised the second highest amount – $9 billion.