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A smattering of climate deals lead a funky Q1

Illustration of a man working on a solar panel with a money overlay

Illustration: Sarah Grillo/Axios

A handful of investments in low-carbon energy and climate tech startups were among the biggest venture deals in an anemic Q1.

Why it matters: "Venture capitalists are optimistic by nature," our colleague Dan Primack notes this morning in Pro Rata. "What they're whistling past, however, is the exit graveyard."

What's happening: Global venture funding continued its quarterly slide since its Q4 2021 peak. Q1's data shows funding dipped 13% to $58.6 billion. That's three times less than what was raised a year ago, according to CB Insights.

  • Venture investors invested $32.5 billion into U.S. startups last quarter, according to data released this morning.
  • That’s about half the $71.2 billion poured into U.S. startups a year ago.

Meanwhile, venture-backed IPOs are a nonentity, the SPAC balloon has deflated, and acquirers are scared of both antitrust regulators and an economic slowdown.

Zoom in: We reported earlier this month that this market chill is seeping into climate tech — a sector that had initially seemed resilient to the cool down due to robust government incentives and investor urgency around climate change.

Yes, but: There is some activity.

  • Battery developer Our Next Energy in February posted the ninth-biggest equity deal of the quarter at $300 million. It was the third-largest Series B.
  • Our Next Energy also emerged as a unicorn along with de-extinction and biotech company Colossal Biosciences, which announced a $150 million Series B in January.
  • Other deals involved Verso Energy, Palmetto Energy and Xpansiv.
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