Net-Positive Climate Tech in the New Year
Climate tech has seen a sharp rise in activity over the past year. 2020 was already a breakthrough year for the industry, and 2021 shared the same rise.
What were the notable highlights within the industry pushing us to eat, make, move, and live better? What is the current state of these areas, and how can we ensure 2022 continues these positive trends, not only in terms of monetary figures, but in potential future impact?
Professional service PwC stated in their year-end report on climate tech, startups within the industry accounted for 15% of every venture capital dollar invested through Q2 of 2021, and the trend seems to be continuing. Climate tech deal sizes saw a dramatic increase as well, quadrupling over the year to a new average of $96 million. PwC reported a total of $87.5 billion in climate tech investments in 2021, and estimated over 6,000 investors are currently targeting the industry.
Towards the end of 2021, the corporate venture arm of food company Archer Daniels Midland announced a record-breaking $347 million round of funding for Future Meat Technologies, a maker of “cultivated” meat.
“The entire cultivated meat industry is a massive agent of change, creating a sustainable future for coming generations,” said Founder and President Dr. Yaakov Nahmias. From food waste to animal-free protein, investors are continuing to show interest in the solutions these companies are offering to consumers and the planet.
The mantra of At One Ventures, the firm co-founded by Planet Home Solutionist Tom Chi, is: “To catalyze a world where humanity is a net positive to nature.” The mission of At One Ventures is to find and utilize disruptive ventures, which have “radically better unit economics” than the traditional paths. “Unit economics wins the day, as opposed to political action or ire,” Chi said.
One example is Cruz Foam, a young circular economic startup using aquaculture to make a styrofoam packaging alternative. Using shrimp shells that break down in under 2 months, it can be produced cheaply, saving close to 30% in costs, all while actively reducing food waste. The combination of benefits to multiple sectors caught the attention of investors early, Chi said.
The Move area continually sees the largest amount of funding. Electric vehicles, mobility solutions, and other innovative transportation technologies are attracting significant investor attention.
Of ten startups that attracted the most investment in 2021, eight fell under the Move area. 78 climate tech startups are now worth over $1 billion, with 43 considered part of the clean transport and fuel sources sectors.
At One Ventures is also a backer of Dendra Systems, a drone company enabling aerial seeding for biodiversity at scale. The drones are capable of seeding 60 hectares a day, ending with an ability to seed 11 times faster and 3 times cheaper than traditional methods. The company pulled in $7 million dollars in revenue just last year.
“Innovation is critical to meeting the challenge and the good news is that climate tech investment is up significantly across the board,” Emma Cox, global climate leader at PwC, said. Climate technologies like these continue to prove their worth, offering tangible and scalable solutions for business and people alike.