Climate tech investing: dollars up, deals down

The amount of money invested in climate-tech companies during Q3 rose 19% to $16.6 billion compared to the year ago period, new data shows, as the number of deals fell.

Why it matters: The global data reveals that despite a broad funding drop, sectors like batteries have continued to draw big rounds.

Details: The quarterly figures from BloombergNEF found that venture capitalists and private equity investors struck 241 climate-tech deals, a 9% drop from the 266 deals a year ago.

• The increase in the overall funding was largely pulled up by a handful of big deals.
• These include fundraisings by low-carbon steel makers H2 Green Steel ($1.6 billion) and Boston Metal ($262 million). Swedish battery-maker Northvolt raised a $1.2 billion round.
• China received the most climate-tech investment dollars in Q3, followed by the U.S. Sweden was third, thanks to H2 Green Steel and Northvolt.

Of note: Thirty-four new climate-tech VC and private equity funds closed in the third quarter, with a total of $8.2 billion. The top-three most prolific investors were Breakthrough Energy Ventures, Lowercarbon Capital and Microsoft Climate Innovation.

• The report doesn't track investments under $1 million, so it's not surprising that more seed investors like SOSV and Plug and Play Tech Center aren't on the list.

Big picture: Climate tech hasn't been immune to the overall downturn, but it's continued to fare better than other sectors.

• BNEF analyst Musfika Mishi said aside from the big deals, there hasn't been "enough time to show an upward overall trend" in climate-tech investing.
• Regulations supporting climate tech, like the Inflation Reduction Act, have continued to help keep investment flowing, said Mishi.