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Report: Carbon and emissions-tech funding set to beat 2022 total

Data: PitchBook-NVCA; Chart: Axios Visuals; Chart: Axios Visuals
Data: PitchBook-NVCA; Chart: Axios Visuals; Chart: Axios Visuals

Investors are on track to invest more funds into startups that remove and lower carbon emissions this year than they did in 2022, according to a new report from PitchBook and the National Venture Capital Association.

Details: Venture capitalists invested $4.1 billion into 162 startups that remove and reduce carbon emissions in the first half of 2023, says the PitchBook/ NVCA report.

  • That total puts it on pace to easily exceed last year's total of $6.3 billion and to match 2021's haul.

Of note: Climate Tech VC released a report that said first-half funding in the space fell compared to the same prior-year period. The discrepancy is likely due to how the two reports define certain climate tech subsectors.

  • The PitchBook/NVCA report uses a specific breakdown of its "carbon and emissions tech" vertical. It includes startups across carbon removal, carbon accounting, lower carbon production of cement, fertilizer and mining, as well as building efficiency and land monitoring.
  • Climate Tech VC's numbers include climate tech startups across seven categories — like energy, transportation and food — and more than 60 subsectors.

What's next: It's clear that the Inflation Reduction Act, which passed in August 2022, is a major catalyst for climate tech startup funding.

  • The PitchBook/NVCA report also says that credit monetization provisions, released a month ago, "will provide vital liquidity to startups advancing the energy transition."
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