OVERVIEW OF CLIMATE TECH
INDUSTRY
What is Climate Tech?
Technologies that are explicitly focused on reducing GHG emissions
The term climate tech is purposefully broad to incorporate the broad swathe of technologies and innovations being used to address GHG emissions and
the broad array of industries in which they are being applied.
Why is Climate Tech Important ?
Climate technologies aim to better our ability to mitigate and adapt to the effects of climate change
Only way to achieve the
+9% global targets is Climate -45%
Tech
Increase in global Reduction in global
greenhouse gas greenhouse gas
emissions projected by emissions needed by
2030, compared to 2010 2030, compared to 2010
The importance of climate technologies in measuring, managing, and reducing carbon dioxide levels in our atmosphere can not be understated. AI, machine
learning and blockchain along with new climate technologies, coupled with more traditional ones such as wind and solar power, provide solutions to stave off
the worst effects of climate change on the way to net zero.
Source: UNFCC
Climate tech vs. clean tech: What's the difference?
Climate technologies aim to better our ability to mitigate and adapt to the effects of climate change
What is clean tech? What is climate tech?
The term clean tech started when new Climate tech deals with technology
technologies were offered to investors that combats climate change by
to help reduce environmental damage mitigating global greenhouse gas
back in the early 2000s. emissions.
Initiative Initiative
Clean Water Agri Tech
Air Quality Afforestation
Waste Reduction Carbon Capture
Clean Energy Geoengineering
Source: TechTarget
Evolution of Climate Tech as
an Industry
Climate Tech 1.0
The first wave of climate technology investing
• The first wave of climate technology investing
(Clean Tech 1.0) began in the early 2000s as Climate tech 1.0 Capital Inflows
Silicon Valley venture capital (VC) firms marched
US $ Million
into the sector with more enthusiasm than
experience. 7000
6000
• Between 2006 and 2011, we estimate that investors
poured approximately $25 billion into clean tech 5000
companies.
4000
• Much of this enthusiasm and interest was 3000
driven by generalist investors who entered the
market without fully comprehending the 2000
technical risks, capital intensity, and extended
timelines of these early clean tech investments. 1000
0
• For a variety of reasons, this first wave of funds 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
would ultimately generate poor performance.
Climate Tech 2.0
The successful phase for climate tech
Climate Tech 2.0 investors have taken a more measured approach to technology risk with more emphasis on software and
optimization solutions, which are easier to scale and less capital intensive.
Climate Tech 2.0 appears to be benefiting from
multiple macro factors:
I. Drastic decline in the cost of renewables and
batteries.
II. The cost decline in renewables has been so
dramatic that solar and wind are frequently
cheaper than fossil fuels.
III. Massive government support has been catalyzed
for climate-friendly innovations.
IV. Recent geopolitical upheavals have given a
heightened sense of urgency to the demands of
the transition, especially with sustained and
legitimate fears around the worsening situation for
energy access in Europe.
V. Outside of the United States, the European Union
has pledged over 30% of its budget, roughly $633
billion, on climate-related spending through 2027.
THE GEOGRAPHY OF CLIMATE
TECH
World climate tech activity from 2000 to 2022
Climate tech entrepreneurship and investment have intensified in the last ten years
2000-2004 2005-2009 2010-2014 2015-2019 2020-2022
Founding Founding Founding Founding Founding
activity in 21+ activity in 34+ activity in 41+ activity in 47+ activity in 32+
and funding in and funding in and funding in and funding in and funding in
10+ countries 15+ countries 29+ countries 46+ countries 53+ countries
250
Companies founded (#)
200
150
100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Companies Founded Funding Amount
Source: Pitchbook, Greenspace Navigator/Deloitte Analysis
The increasing geographic diversity of climate tech is a long-term trend
Percentage share of global climate tech companies by country
• Climate tech companies are
established across more
23% than 65 countries.
United States
United Kingdom • They are concentrated in
37% eight countries whose
Australia economies are among some
France of the world’s largest:
3%
Australia, Canada, China,
Canada
France, Germany, India, the
4% China United Kingdom (UK), and
Germany
the United States (US).
7% India • Collectively, they are the
Rest of the world headquarters for
approximately three-fourths
9% 8% of global climate tech
4% 5% companies
Source: Pitchbook, Greenspace Navigator/Deloitte Analysis
Climate Tech from a
Sectoral Lens
How climate tech sectors are classified and what they do?
Overview of different sectors of climate tech
Built Environment Carbon technology Energy and Grid Food and Agriculture
Making our How can we lower the Transforming power Regenerative
buildings more CO2 concentration in generation and agriculture and ways
energy efficient the atmosphere electricity sources to sustainably
and reliable produce food
Industry and Intelligence and Transportation Supporting
Manufacturing adaptation and Mobility Catalysts
Decarbonize the entire Climate risk and Electrifying how Businesses that
life cycle of production data that help us people and things indirectly support
of goods adapt to the effects move decarbonization
of climate change efforts
Climate Tech Investments by verticals
Investment overview of different segments
Climate Tech Investments Verticals by 2023 (In $ BN)
0 2 4 6 8 10 12
• Energy has been by far the most
Energy 11 invested segment in climate
tech in 2023 ($11B as of July
2023), almost double the amount
Transportation 6
flowing in the transportation
sector.
Real Estate 3
• Overall, energy& transportation
still accounts for over 60% of the
Industry 2
funding.
Food 1 • Carbon has been the fastest-
growing segment, reaching $5.1B
Carbon 0.8
in 2022.
Blue Economy 0.7
Climate Fintech 0.2
0 0.2 0.4 0.6 0.8 1 1.2
Source: Dealroom
Different segments in each sector
Overview of different segments of climate tech
• In 2022, the combined enterprise value of
global climate tech startups dropped by
20% to $2.0T, before recovering and
reaching $2.6T all-time high in 2023.
• The climate tech ecosystem increased its
combined value by 60x in a decade.
Climate Tech Enterprise Value
2013 2015 2017 2019 2021 2022 2023
Source: Dealroom
Climate tech investments by segment
Overview of different sectors of climate tech
Vertical 2022 2021 2020 2019
Circular Economy $435M $461M $295M $190M
Alternative Protein $359M $418M $342M $219M
Urban Tech $300M $271M $213M $169M
Electric Mobility $266M $308M $267M $209M
Climate Fintech $261M $332M $142M $107M
Renewables $223M $249M $230M $220M
Carbon Capture And Storage $136M $109M $22M $4M
Blue Economy $112M $158M $115M $76M
Food Waste $100M $105M $125M $55M
Hydrogen $95M $87M $37M $22M
EV Battery $90M $112M $46M $101M
Precision Agriculture $66M $34M $20M $16M
Regenerative Agriculture $38M $15M $7M $0
Vertical Farming $37M $39M $53M $18M
Methane Emissions $31M $33M $4M $7M
Biofuel $8M $12M $11M $11M
Nuclear Energy $6M $21M $10M $29M
Source: Dealroom
