Eka’s Weekly Roundup (23 June 2023)

Issue 37 l Climate Tech in H1 2023

Jun 23, 2023

Silicon Valley Bank published a note on the state of climate tech funding as of H1 2023 this week. The report focuses on government support, diversification with climate tech, and data measurement. The headline is that climate tech funding remains resilient relative to generalist sectors, with VC investment falling -21% compared to the start of 2022 compared to -41% for other technology sectors over the same period.

Running the numbers for H1 2023 🗞️

This report highlights key takeaways regarding achieving net zero and the state of climate tech investments. Deal count is down, but not by as much as other sectors.

Turning to valuation, this interestingly saw less of an uptick in seed than other tech. On the whole though climate tech valuations have risen over 2021-2023YTD relative to other tech.

One of the most interesting charts we thought was the default rate on infrastructure finance projects. Green projects have lower default rates over the life of financing compared to non-green infra projects. This links well into our shared value thesis as written in Solving for Impact Tech.

Beyond the charts, the key points relate to:

Government support: Massive federal spending is driving momentum for clean energy projects, improving the economics for climate tech investors and founders.
Climate tech diversification: Combining clean tech innovations with artificial intelligence and software creates opportunities to optimize, decrease costs, and develop new markets, leading to a more diverse cohort of climate tech companies.
Measurement of data: Capturing and synthesizing data from climate tech innovations generates new revenue streams, benefiting both hardware and software companies.