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Carbon tech racks up $7.2 billion for tracking hot air

Alan Neuhauser
Jul 5, 2022
Illustration of a net catching carbon dioxide molecules with shapes and money.
Illustration: Gabriella Turrisi/Axios

It's not you — carbon-tech deals have proliferated lately. Investment in the so-called "carbon tech" sector has mushroomed to $7.2 billion, per PitchBook.

Why it matters: The data puts hard numbers to what investors have been seeing anecdotally (and Megan Hernbroth's previous reporting).

What's happening: Even as public and private markets cool, the SEC's climate-disclosure rule, plus ongoing public pressure to at least track corporate emissions, is driving investment in certain climate-tech sectors.

  • Watershed, the carbon-accounting startup, hit unicorn status with a $70 million Series B in February. And LevelTen, an online marketplace for renewables, raised $62 million at a $140 million valuation.

Yes, but: There's some noise in the data, and PitchBook's definition of "carbon tech" may not be what everyone has in mind.

  • PitchBook's carbon tech definition encompasses fintechs and carbon capture and sequestration (CCS) companies, in addition to carbon-accounting startups.
  • It includes, for example, Crusoe Energy Systems, which uses waste methane from oil and gas operations to power data centers and crypto mining. The company's raised $708 million with a $1.8 billion valuation.
  • The data also loops in Generate Capital, which is generally seen more as an investment firm, even though it also operates assets. (PitchBook lists it as a fintech.)

Of note: Carbon capture is the big kahuna. Climeworks, for example, has raised $806 million, and LanzaTech has raised $704 million.

Zoom out: It's tough out there. Early-stage startups are now feeling the pinch in their valuations, and there are a handful of companies that have seen their valuations fall below the amount they've raised from investors.

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