Venture Capital Funding for Climate Tech Dips 40% in First Half of 2023
After bucking the broader trend of deals slowing down, climate tech investments dropped precipitously compared to this time last year.
A wind turbine at the Omega Energia Assurua complex in Brazil. Whether the venture capital funding slowdown in the first half of 2023 marks the start of a trend remains to be seen.
Photographer: Maria Magdalena Arrellaga/BloombergClimate tech has been an investing bright spot since 2021 in an otherwise dismal venture capital ecosystem, raking in deals as other sectors stagnated. But the first half of 2023 saw a decrease in climate venture funding, according to a new report from Climate Tech VC (CTVC), which tracks venture capital funding for climate tech across seven categories and over 60 subsectors.
Funding during the first six months of the year totaled $13.1 billion. That marked a 40% decrease compared to the same period last year, according to the report. That change reflects an overall slowdown in venture capital investments, driven by larger macroeconomic forces like higher interest rates as well as sector-specific issues. In its report, CTVC noted that while “other market observers may promote larger climate market sizes,” it excludes state-backed and private equity investors as well as post-IPO, grant and other types of funding from its analysis.