Climate Tech Investing Falls 40%, But Holds Up Better Than Overall Funding Market, PwC Research Finds
October 18, 2023 by Joe Panettieri
Venture capital and private equity investments in climate technology startups has declined 40% so far in 2023, according to PwC research.
At first glance, the reduced funding is a painful reality for entrepreneurs who lead green IT, renewable energy and circular economy startups. But take a closer look at the PwC research and the percentage declines in other categories. The revelation: Funding in the green market is holding up better than the overall startup funding market.
In a prepared statement about the research, PwC UK Global Climate Leader Emma Cox said: "The development and scale-up of climate technology is an essential part of meeting the climate challenge. So, while it is not surprising that absolute levels of investment in climate tech have fallen along with the market, it is concerning. The good news is that the sector has performed well in relative terms, with investment falling less than in other areas. It is also encouraging to see a shift in the balance of investments towards technologies that can cut emissions the most. Now we need to see that shift continue, coupled with an increase in the absolute levels of investment in all technologies with the potential to cut emissions."
Added Will Jackson-Moore, global sustainability leader for PwC UK: "A challenging macroeconomic environment, sinking valuations, and geopolitical turmoil has seen capital flows to climate tech ventures drop 40% at a time when climate tech needs it most. But while such industry and macroeconomic dynamics may cloud investor confidence, they also present significant first-mover opportunities for investors to engage in the current dip, as the need for climate tech innovations will only grow stronger."