The collapse of Silicon Valley Bank (SVB) could have financing implications for climate- and green-focused technology startups.
Among the factoids to keep in mind:
- Climate technology companies raised $59 billion in funding across 1,182 deals in 2022, according to BloombergNEF.
- US venture capital investments in climate tech companies increased 80% between 2020 and 2021, reaching $56 billion, SVB said in a 2022 report.
- SVB served more than 1,550 customers focused on clean technology and sustainability, the bank said before its collapse.
- Traditional banks typically do not work with climate and sustainability startups because such companies typically have unproven, highly risky business models.
Near term, such startups will need to navigate a higher cost of capital for a credit line, a Guggenheim analyst told Bloomberg.
Some pundits are hopeful that the U.S. Inflation Reduction Act in some ways may fill the funding and financing void. The act includes approximately $369 billion in incentives for clean energy and climate-related program spending, including funding to encourage carbon capture, utilization, and storage (CCUS) projects, according to the U.S. Department of Energy.
Some climate-savvy banks may also step in to fill the SVB financing void. Among the companies to watch: Forbright Bank, which is a full-service bank, direct commercial and consumer lender that's "committed to playing an important role in accelerating the transition to a sustainable, clean energy economy," the bank asserts.
