Axios Pro: Climate Deals

February 28, 2024

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1 big thing: Q1 funding momentum

Data: BloombergNEF; Note: *Through Feb. 22, 2024; Chart: Axios Visuals
Data: BloombergNEF; Note: *Through Feb. 22, 2024; Chart: Axios Visuals

Venture capital firms have raised around $3.2 billion across 18 new climate-focused funds since the start of the year. That compares with $4.1 billion raised for 16 funds through all of Q1 2023.

Why it matters: The burst of activity has climate funders and founders sounding upbeat, though clouds continue to loom overhead, Alan writes.

Zoom in: Climate-focused firms ArcTern Ventures, Voyager Ventures, Equal Ventures and Overture Climate VC have together announced $670 million in new early-stage funds since Jan. 1.

  • Meanwhile Congruent Ventures ended 2023 by announcing a new $275 million fund.

Context: The climate tech industry has hoped for a thaw in venture markets. Global investment last year plummeted 40% from 2022.

  • Climate tech was slightly insulated by government green incentives and corporate ESG mandates, which continued driving money into the space.

Behind the scenes: Climate investors tell Axios that they're seeing a fresh surge in dealmaking, sounding far different than they did at this time last year.

  • Pension systems, university endowments, family offices and similar LPs still have green mandates to meet. Federal agencies are slowly but steadily implementing incentives introduced in 2022's Inflation Reduction Act.

Bottom line: Climate investors may be sounding more energized, but it will be a few weeks before we find out if the data supports the anecdotes.

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