Q1 2023 saw a massive drop in Climate Tech VC. $11.2B in over 400 deals powering innovation over the last 3 months. The global downforce of a massive funding drop is challenging, yet Climate Tech appears to be maintaining traction and momentum through the economic chicane we're in now.
2022 was an enormous year for Climate Tech VC. The US invested more Climate Tech VC in 2022 than the entire 2006-2011 Clean Tech 1.0 Boom and overall the world delivered $70.1B of investment, defying gravity in a broader market that had fallen significantly. While it is still very early in the year, based on Q1 2023 deal activity and the broader economy, we're forecasting around $36B of full year 2023 Climate Tech VC investment, a little over half of the record levels of 2022.
HolonIQ's quarterly analysis on Climate Tech VC is based solely on our proprietary impact intelligence platform. All data is sourced directly by HolonIQ technology and analysts from public disclosures and private submissions by governments, companies and investors around the world. This analysis is focused exclusively on venture and growth capital and as such we exclude all private equity buyouts, corporate subsidiary funding, project finance, public funding, grant and academic funding to ensure we are primarily tracking flows of venture and growth focused equity risk capital. HolonIQ has customers and staff around the world and we host summits and CEO roundtables on all continents each year and as such, our coverage of markets such as China and more broadly Asia, Africa and the Middle East is extensive compared to peers, often resulting in larger levels of reported activity and investment.
Figure 1. Growth in Climate Tech VC - 2010 - Q1 2023 including full year forecast
Climate Tech saw 32 mega rounds (>$100M) in Q1 2023 attracting nearly $7B in aggregate, accounting for nearly 60% of all venture funding for the quarter. Notably, the two year old 🇨🇳 Zeekr, a luxury electric vehicle brand of China's Geely, raised a $750M 'Series A' at a $13B valuation, catapulting itself to decacorn status amid rumours of an IPO filing in the US late last year. Nashville-based provider of renewable energy, carbon, and battery storage solutions, 🇺🇸 Silicon Ranch raised $600M led by existing Silicon Ranch shareholders, including Manulife Investment Management. Chinese Solar cell and module manufacturer 🇨🇳 SolarSpace secured $442.5M Series B financing. Key clusters that have attracted significant investment include Solar, Vehicles, Batteries, EV Charging, Aircraft and Sustainable Materials, which collectively account for over 70% of global climate tech venture funding.
Beyond Venture and Growth stage funding, HolonIQ identified $70B of private funding through 610 deals in Climate Tech in Q1 2023 as shown in the Platform Screenshot below. Figure 2 shows the 'Studio', HolonIQ's proprietary data analytics and visualization engine where in this chart, each deal is a bubble, sized in USD by its deal size, colored by it's sub sector according to the Open-Source Global Climate Tech Taxonomy. This perspective includes debt funding, private equity (buy-out) and some project finance where we can apply granular conditions to look for patterns and identify trends on both global and highly granular industry dimensions.
Figure 2. HolonIQ Platform Screenshot - Granular Composition of 610 Climate Tech Deals with a total of $70.8B investment in Q1 2023 (includes debt, private equity and select project finance
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