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Venture Capital Firms Are Fighting to Throw Money at Cleantech

Early stage valuations are through the roof, which is a good thing — as long as companies can deliver.

Passengers with electric scooters board a train in Madrid.

Passengers with electric scooters board a train in Madrid.

Photographer: Paul Hanna/Bloomberg

Just last month, a pair of investment funds closed more than $12 billion of private equity funding for climate- or energy transition-related investments. I noted at the time that it was a welcome inflow of capital to an area that hadn’t seen much interest in years … or ever, really. I also wondered a bit where that money might go.

Now we know — or at least have a decent idea — thanks to Climate Tech VC’s review of funding in the first half of 2021. The newsletter’s authors tracked about $16 billion of funding in 1Q and 2Q 2021, including more than 250 individual deals across seven sectors: carbon, climate, consumer, energy, food and water, industrial, and mobility. That’s almost as much as all of 2020 and not far behind 2018’s total of $17.9 billion.