Climate Tech Investment Landscape 2022

ClimateAngels | Jan 29, 2023

In the last few years, the economic effects of the climate crisis became more apparent, and investors started taking notice. In 2022, $40 Billion were invested into Climate Tech companies across 1000+ deals.

While the overall funding dropped by 3% it was unsuccessful in putting a dampener on the innovation front as the deal count increased by over 40%.

According to the latest CTVC’s analysis growth stage funding in Climate Tech decreased sharply during the past year, falling 24% from 2021’s highs. The middle-sized funding remained leveled while early-stage funding activity gained high momentum and increased 51% (Seed) and 64% (Series-A) over 2021 levels.

And based on the Axios survey, accelerators are among the most active early-stage investors. Since the investors invest in numerous firms, although at lesser transaction sizes, as part of the accelerator model, accelerators, more so than specialized venture funds, are playing a significant role in the industry.

The top five early-stage investors took part in 70 investment rounds at the pre-seed, seed, or Series A level from January’21 to August’22. The average and median deal size for these rounds is $6.5 and $2.5 Million respectively, indicating a higher concentration of lower value deals.

In India, the Climate Tech ecosystem is still in its nascent stages but offers high potential as technologies that are developed in a price-sensitive market like India have the potential to take the world by storm.

According to HolonIq’s estimates Climate Tech funding in India increased by 9x from $400 Million in 2021 to $3.7 Billion in 2022.

Source: HolonIQ

According to a study by Deloitte, it is an $11 Trillion opportunity for India which can be capitalized on by limiting rising Global temperatures and exporting Climate solutions.

Sectors Angel Investors are interested in and are targeting:

Angel investors have shown an increased interest in and support for nuclear, solar, and hydrogen technologies.

As Electric Vehicles (EVs) penetration is rising investors are also targeting the Battery supply chain, from the exploration of metals and minerals to mining, refining, and production.

In addition to that, there has been an increase in the building sector, within sectors such as low-carbon cement, HVAC advancements, and other efficiency measures.

While the early-stage deal activity has increased it still accounts for only 40% of Climate Tech deals signed in 2022. The need to invest risk capital in Climate Tech companies now is greater than ever before.

Bill Gates in his book ‘How to avoid a Climate Disaster,’ mentions how investors willing to play the long-term game when it comes to Climate Technologies can generate alpha returns and nurture innovation.

He further states,

“Promising concepts and viable products are separated by a Valley of Death that neither government funding nor conventional investors can bridge completely, a key part of the solution is to attract investors who can afford to be patient, and whose goal is as much to accelerate innovation as it is to turn a profit.”

– Bill Gates, Founded Microsoft

What can Climate Angels do for you?

At Climate Angels, we make Climate Investing effortless. We take care of all the legal hassle and paperwork for our investors. Our experienced team has perfected the art of due diligence over the years ensuring that our investors have access to the ‘creme-de-la-creme = the best of the best’ of Climate Startups.

With a network of more than 100+ investors, which includes several leading tech entrepreneurs and Angel Investors in India, we are a one of its kind platform for investors looking to invest in Climate Technologies across the globe.

Invest with us to generate the alpha-level investing returns in Climate Tech.