Despite a variety of macroeconomic challenges in 2022, venture capital investments in climatetech continues to outpace the market according to recent analysis by Pillsbury. As reported in Climatetech: Venture Dealmaking & Cross-Border Investment Trends, the sector is on pace for a strong year that may only be surpassed by the unprecedented deal activity of 2021.

“Qualified opportunities tend to bring capital onto different continents,” noted Pillsbury partner and report contributor Stan Lewandowski, who focuses his practice on advising startups across a variety of international markets. “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.”

Some key findings in the report include:

  • The total value of climatetech venture deals through early August was $14.3 billion, which lags totals from a blockbuster 2021 but already exceeds 2019 and is on track to easily surpass 2020 aggregate value.
  • Climatetech deal values dipped 25.3% between Q4 2021 and Q1 2022 but have recovered dramatically in the months since, growing 19.2% between Q1 and Q2 2022, even as other sectors struggled to regain investor confidence.
  • Internationally, North America continues to drive the largest percentage of climatetech deal value. Europe is poised to take over the number two spot this year, following a fifth consecutive year of declining values out of Asia.
  • Pre-money valuations increased across company stages, particularly for late-stage companies, for which the median valuation increased 48.5% YTD and exceeded $100 million for the first time.
  • Even with predictably fewer new market entrants, the nearly $500 million in first-time climatetech financings year-to-date has already eclipsed the total in 2020.

The research is based on proprietary data provided by Pitchbook Venture Monitor as well as the Pillsbury’s extensive experience working first-hand with Climatetech startups and investors. To read the report in full, click here.

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