Increased investment in environmental technology worldwide demonstrates PwC research.
According to the research “State of Climate Tech 2021”, conducted by PwC during the second half of 2020 and the first half of 2021, there was a strong inflow of investments from business (venture capital – VC) and private equity (private equity – PE) climate technology (climate tech), which reached $ 87.5 billion, with more than $ 60 billion being recorded in the first half of 2021 alone. This is an increase of 210% compared to $ 28.4 billion invested in the previous twelve months, while the tendency to direct 14 cents from every dollar of investment capital in climate tech is gradually forming.
However, the study shows that there is a lack of investment in better-performing technologies that can help reduce global CO2 emissions more effectively. Specifically, among the 15 technological solutions examined by the research, the five that represent more than 80% of the potential for reducing CO2 emissions by 2050, gathered only 25% of the investment in environmental technology in the period from 2013 to the first half of the year. 2021. These are: Solar energy, wind energy, food waste technology, green hydrogen production and low emission alternative foods / proteins.
Climate tech includes technologies that aim to reduce greenhouse gas emissions. Following rapid growth between 2013 and 2018, investment in this sector remained stagnant until 2020, as macroeconomic trends and the global pandemic acted as a deterrent. Nevertheless, investment recovered rapidly in the first half of 2021, thanks to a greater shift towards ESG criteria in private markets, new regulations and standards, and the commitment of thousands of companies to adopt climate-neutral strategies.
According to PwC research:
– The average transaction volume in climate tech (environmental technologies) almost quadrupled in the first half of 2021, to $ 96 million from $ 27 million last year
– About 1600 investors were active in the first half of 2021, compared to less than 900 active investors in the first half of 2020, as the wider investment community becomes familiar with the opportunities in climate tech
– SPAC (special purpose acquisition companies) managed to further stimulate the growth of climate tech, raising $ 25 billion in the first half of 2021, ie more than a third of total funding
– Automotive and transport continue to receive the lion’s share of funding, as e-mobility, micro-mobility and other innovative transport models are attracting investment interest. This difficult sector raised nearly $ 58 billion between the second half of 2020 and the first half of 2021, accounting for two-thirds of total funding.
– Automotive and transport, industry, manufacturing and resource management, as well as financial services recorded the fastest growth on an annual basis between the second half of 2019 and the first half of 2021, with an increase of over 260% each, reaching $ 58 billion, $ 6.9 billion and $ 1.2 billion respectively.
An increase in investment is recorded in all technology sectors assessed, with a focus on technology solutions that can reduce emissions by 20%.
It is also noted that, despite the general growth, the number of early VC investments has remained generally stagnant since 2018. This fact reflects the maturity of climate tech as an asset of a company, but also emphasizes the need to finance more startups with the prospect of becoming “unicorn” and “gigacorn”.
At the forefront of climate tech investment is the United States, which accounts for nearly 65% ​​of $ 56.6 billion worth of VC investment between the second half of 2020 and the first half of 2021. Over the same period, investment in China is estimated at $ 9 billion, while in Europe the total reached $ 18.3 billion, thanks to an almost 500% (494%) increase in the Mobility and Transport sectors, compared to the previous twelve months.
Dimitris Sakipis, ESG Leader of PwC Greece, states: “Over the last year, global pressures to tackle the climate crisis and achieve climate neutrality have increased. It is clear that technology can play a catalytic role in promoting accelerated innovation. “The VC funds ecosystem combined with global technological talent creates the right conditions for a coordinated fight against climate change.”
Source: Capital
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