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Despite the whispers of failure Earlier this year, investors continued to express their faith in climate technology. Although the numbers are down compared to 2021, a year that many agree will be a standout in the VC world, 2020 is on track to be the second hottest year for investing.
Moreover, the agreement counts and prices were in the second quarter of this year compared to the first, which suggests that the slowdown has more or less skipped climate technology.
Although the deal count was down nearly 19 percent from last year, it was up 15.4 percent in the second quarter, according to a Pitchbook analysis. Overall market deal value, down year-over-year, increased sharply in Q2, and the average value of a deal held steady at $23.6 million, more than triple what it was five years ago.
In some ways, those modest numbers can be interpreted as a bit chilly. But the sector is taking a breather in terms of recent potential. Just five years from now, Pitchbook estimates the climate technology market will be close to $1.4 trillion, representing a compound annual growth rate of 8.8%.
With such growth coming down the pike, there are many different bets in the climate technology sector, but few stand out for their early potential and favorable tailwinds.
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