HomeAnalysisSilicon Valley Bank Releases Annual Climate Tech Report

Silicon Valley Bank Releases Annual Climate Tech Report

SVB

Climate tech investors remain committed to the sector, according to a new report from Silicon Valley Bank (SVB), a division of First Citizens Bank.

While overall venture capital (VC) fundraising and deal activity in 2023 saw a 24% decline from 2021, climate tech is only 14% below 2021 results, with several individual subsectors like carbon tech and climate data showing signs of growth. 

Key Findings include:  

Climate tech fundraising remains resilient 

  • While overall venture capital fundraising in the US hit a six-year low, climate tech fundraising has remained steady, settling at a level similar to 2020. Among the most active CVCs, climate tech now accounts for 11% of deals up from 2% in 2020.

Companies are running low on cash 

  • The decline in investment, coupled with climate tech’s capital-intensive business models, have left 60% of climate tech companies with less than 12 months of cash runway, relative to 53% for all tech companies. As a result, companies are putting a greater emphasis on profitability. Seventy-six percent of climate tech software companies are seeing improvements in EBITDA margin year-over-year and 65% of climate tech hardware companies are also seeing gains.

Climate tech enjoys long-term tailwinds  

  • About 88% of global carbon emissions are subject to a net-zero goal. Interest in climate tech solutions continues to increase and advancements have brought down the costs of sustainable technology. It is now cheaper to develop new renewable energy than to stick with fossil fuels.

VCWire

16/05/2024