Climate Tech Investments Rise to $16.6 Billion in the Third Quarter

Climate technology companies recently experienced their most successful fundraising quarter in nearly two years, securing $16.6 billion in investments for a diverse range of startups dedicated to decarbonization and low-carbon initiatives, as per a recent analysis conducted.

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The report, covering the third quarter of 2023 and published on Thursday, provides a comprehensive overview of climate technology spanning various sectors, including energy, transportation, construction, industry, and agriculture. It also tracks investments in the climate and carbon sector, encompassing technologies designed to assist polluters in monitoring or mitigating their emissions, such as capturing carbon pollution from industrial smokestacks and permanently storing it underground.

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Funding from venture capitalists and private equity firms surged by almost 63% in the third quarter compared to the $10.2 billion raised in the previous quarter, despite concerns of an impending investment slowdown. However, these past three months also marked a record-low number of deals, with a total of 241 investments. This suggests that investors in climate technology have become increasingly cautious with their investments since BNEF initiated quarterly tracking in late 2021.

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Mark Daly, the co-author of the report and the Head of Technology and Innovation at BNEF, commented, "This quarter's funding total was really boosted by a small number of deals in the high hundreds of millions and even billions." He further noted that the high total "overshadowed the relatively low number of deals that actually occurred."

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Sweden has emerged as the world's third-largest market for climate technology in terms of funding, with a remarkable 224% increase in investment value compared to its four-quarter rolling average. This growth is attributed to significant funding rounds by two Swedish startups: battery manufacturer Northvolt and H2 Green Steel.

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Furthermore, BNEF identified that 34 new venture capital and private equity funds focusing on climate technology closed during the third quarter, with an anticipated injection of $8.2 billion in fresh capital.

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