Climate tech investment increased but not in the right areas

According to new research from PwC, investment in companies focusing on the development of technology to fight the climate crisis increased to $87.6 billion this year.

The financial services company said in its PwC report that it is up more than 200% on the $24.9 billion invested in climate tech last year. They added that 15 cents of every venture capital dollar move to companies working on climate technology.

According to PwC, private equity companies and venture capital do not always back the right companies focusing on climate tech.

Main focus

The company focuses on the five leading technology solutions:

• Solar power
• Wind power
• Food waste technology
• Green hydrogen production
• low greenhouse gas proteins/Alternative foods

The company says these five received only 26% of the climate tech investment between 2014 and 2021. This is despite the fact that technologies in these areas represent more than 82% of the emissions reduction potential in the following 30 years.

PwC said that a significant portion of the share (equal to $59 billion) of climate tech funding mainly went to mobility and transportation companies. These companies include ones focusing on electric vehicles, e-scooters, and flying taxis.

According to PwC, at the beginning of 2021, the climate tech deal’s average size increased more than four times to $97 million. It is up from $26 million one year ago. The number of active climate tech investors increased from 800 at the beginning of 2020 to over 1,500 in 2021.

Climate tech SPACs grew $26 billion at the beginning of 2021.

On Tuesday, Sweep, a French climate tech start-up, reported that it had raised $23 million by Balderton Capital. This is a venture company based in London. Balderton Capital has also backed Citymapper (urban navigation app), e-scooter company Voi and car service Virtuo.

The world has a challenge of ten years to solve global greenhouse emissions.