Climate tech deals grew 37.9% in Q1. The May 2024 report says infrastructure, industry and renewable battery deals were hot commodities, and median pre-money valuations were rising across the board. The report also notes that in the 12 months through September 2024, capital flows and transaction volume continued to trend downwards, dropping below levels recorded in 2019.
The report also noted that the distribution of climate tech investment across sectors has changed and that during the first three quarters of 2024, energy-related startups took in a slightly greater share of climate tech funding—nearly 35%—than they did in 2023 (30%). 'Climate tech is one of the technology sectors that attracts the highest proportion of corporate (CVC) investments,' he said. 'There is also a very active ecosystem of dedicated climate tech funds, especially at the Seed and Series A stages,' said Noronha. 'Today, a significant number of climate tech funds attract corporate/strategic LPs because the collaboration can bring concrete value for the portfolio companies in terms of accelerating their go-to-market or scaling up their real-world deployments and help de-risk such early-stage investment for the CVCs who can tap into deeper domain knowledge.' Noronha believes there is also an increasing proportion of 'generalist' deep tech funds placing bets on climate tech startups. He says this is because the total addressable market is large, and climate use cases enable diversification of the market applications for semiconductors, AI models, or materials startups
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