Funding for Climate Tech Startups in Europe and North America Alone Accounts for 19% of Global Venture Capital Deployed
LONDON/PORTLAND, Ore. – Oct. 20, 2022 – Net Zero Insights, the leading market intelligence platform for climate tech in Europe and North America, together with Alder & Co., a purpose-driven climate tech marketing agency, today announced third quarter climate tech investment results for 2022. A comprehensive set of insights and funding activities reveals climate tech funding is on track to reach an all-time high at year’s end, beating the previous record of $64.1B set in 2021.
“The global economic crisis and the tech slowdown hit the venture market hard in 2022,” said Federico Cristoforoni, co-founder and CEO at Net Zero Insights. “However, climate tech prevailed, increasing its share of global venture investment despite the decline. With the energy crisis on everyone’s mind, climate tech brings hope and has proven it’s here to stay.”
While end-of-year records are set to break, the overall quarter-over-quarter funding decreased by 43% compared to Q1 2022 – a record quarter for VC investment globally. “In North America, we suspect the anticipation of the Inflation Reduction Act (IRA) passing legislation cooled climate tech investments in Q3,” said Melanie Adamson, chief marketing strategist at Alder. The UK and Nordic countries bucked this trend with increasing funding coming from batteries and energy sectors, up by 104%.
Other sectors that are gaining investments include greenhouse gas removal technologies which saw a skyrocketing increase in funding of 24,000% year-over-year in the US alone. “As polluters and corporations start investing massively to reduce their carbon footprint, they will also need to capture and offset hard-to-abate emissions to meet their Net Zero targets. This, combined with the increasing technological maturity of carbon capture and removal solutions, makes me expect this investment area to continue growing rapidly.” Cristoforoni said.
“Unstable energy supplies in Europe undoubtedly are fueling energy innovation.”
While hydrogen technology remains the darling of the press and investors, the sector as a whole saw a 29% funding decline in Europe; however, the bigger picture shows a significant year-over-year increase of 181%.
The winner among countries that captures the most investment remains the US with $8.7B, though it saw a continuous decline over Q3. The UK saw the second-highest flow of capital, hitting $1.7B.
At the end of the spectrum, Germany showed a massive drop in investments of 60% quarter-over-quarter and 78% year-over-year.
“Unstable energy supplies in Europe undoubtedly are fueling energy innovation,” Cristoforoni said. The energy sector attracted more than 43 percent of the investment, while transport and circular economy technologies followed in Q3 2022. Northvolt’s $1.1B recent round of funding led the quarter in attracting the most investment. TeraWatt closely followed with a $1B investment.
For more details on climate tech investment by sector, funding and geography, read the full report.
About Net Zero Insights
Net Zero Insights operates the Net0 Platform – today probably the most comprehensive database of climate tech startups and SMEs operating in Europe and North America. Investors, corporates and decision-makers work with us to gain insight into financial and tech trends by accessing data on funding rounds, activity sectors, technology, patents, contact details, and much more. Find out more: netzeroinsights.com
About Alder & Co.
Alder & Co. is a leading, global strategic brand marketing agency with the mission to drive the adoption of climate technologies until they become universal. Alder partners with forward-
facing, innovative climate tech companies who need progressive brand & marketing strategies to drive growth, secure investment and make the impact needed to address our generation’s most urgent crisis – our environment. Find out more: alderagency.com
Melanie Adamson, [email protected]
Melanie spent the last 20 years researching audiences, building multi-channel plans, and developing sound strategies that have earned her the recognition of her colleagues as a marketing expert among business and consumer industries. Through the partnership of executive and creative staff, she leads the Alder creative and strategic teams to produce successful and effective marketing deliverables for clients. When Mel isn’t running Alder, she loves cooking for family and friends, and sharing stories with a glass of French or Spanish red wine.