Despite rumors of a downturn earlier this year, investors continue to express confidence in climate technology. While the numbers are lower compared to 2021, a year many agree is an outlier in the VC world, they are on track to beat 2020 as the second-warmest year for investment.
In addition, the number of deals and values were higher in the second quarter of this year than in the first, suggesting that the slowdown has more or less skipped climate technology.
While the number of deals is down nearly 19% from last year, it was up 15.4% in the second quarter, according to a PitchBook analysis. The total market deal value, down year-over-year, was significantly higher in the second quarter and the average value per deal has remained 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 slight cooling. But the sector is likely to take a breather given its near-term potential. In five years, PitchBook estimates that the climate technology market will reach nearly $1.4 trillion, representing a compound annual growth rate of 8.8%.
With that kind of growth on the way, there are many different bets to be made in the climate technology sector, but a few stand out for their early stage potential and favorable tailwinds.
This post Climate technology is a hot investment in 2022 — the next five years could be even hotter • TechCrunch
was original published at “https://techcrunch.com/2022/09/09/climate-tech-is-a-hot-investment-in-2022-next-five-years-could-be-even-hotter/”