Climate tech is expected to decline year-on-year by 2024, but new data shows a maturing sector with larger deal sizes.
Venture capital investment in the climate technology sector fell 7% to $12.9 billion, just shy of $1 billion. List of 2023According to a new data. PitchBook report. The report found that round size will increase by 2024, with investors becoming more eager to back companies emerging from their seed rounds.
For years, investors have favored early-stage companies and plowed significant sums into pre-seed and seed-stage startups. That's partly because of the relative youth of climate technology. After the winter hiatus that followed the cleantech explosion that began in December 2007 with the Great Recession, founders and investors retooled their approach and tackled new markets and technologies.
That shift spurred early-stage opportunities. As these startups mature, they become larger, PitchBook data shows that later levels are starting to catch on with higher values.
In 2024, the average deal size was $7 million, an increase of $1 million from last year, and average pre-money valuations rose to $44.5 million from $31.5 million last year. The number of deals fell 27% to 568. By 2023, climate tech startups have secured a total of $13.9 billion across 782 deals.
Climate tech numbers from last year reflect broader market trends. Anthropic; Databricks OpenAI Deal value is down across the board, driven by strong AI-related investments at companies like xAI and Waymo. Q4.
Climate tech investments have weakened as investors nurse any hangovers after a surge during the pandemic. As venture dollars flow into climate tech (and many other sectors), deal size, The quantity and value increased.
Now, some of those early-stage companies are looking to scale up again. Cope with harsh environments. Investors are taking a hard look at unit economics. Struggling startups find it harder to raise; Investors tell me that those who crack the code are being rewarded with bigger deals.