Market Map: Carbon tech’s moment in the sun

To go deeper, read our Q1 2022 Climate Tech Report. PitchBook subscribers can also explore the full climate tech market map with details on more than 2,700 companies.

Spotlight: Carbon tech

Carbon tech companies fall into five subsegments:

• Carbon fintech and consumer: Software applications, platforms and banking services designed to reduce greenhouse gas emissions.
• Carbon capture and storage: The removal of CO2 from emissions sources or the air that is then stored, frequently underground.
• Carbon sequestration: Short or long-term hiding of carbon somewhere other than the atmosphere, such as in the ground, soil, biochar or ocean minerals.
• Carbon accounting: Software platforms for measuring greenhouse gas emissions.
• Carbon utilization: Solutions that put captured CO2 to use in products that add value.

The most valuable VC-backed company in the carbon tech space is Crusoe Energy Systems, last valued at $1.75 billion. The company eliminates flared methane by using the waste energy to power cloud computing centers.

Carbon accounting platforms have also become popular targets for VC backing as corporations prepare for more stringent reporting requirements in the US and elsewhere. One such company, Watershed raised $70 million at a $1 billion valuation in February.

How climate tech deals and exits are trending

Climate tech deal activity remained elevated in Q1 2022 with 273 VC-backed companies raising a combined $9 billion following standout performance in 2021. Companies in the category raised an average 283 rounds and $11.2 billion per quarter last year.

Notable deals from Q1 included a $400 million Series E for indoor farming startup Plenty, $387 million for cultured meat creator Upside Foods, and $375 million for home solar company Palmetto.
 

Exit activity in the climate tech segment declined sharply in Q1, mirroring a trend seen across the VC landscape that has been driven by stock market volatility. A total of 22 exits were consummated at a combined value of $6.4 billion in Q1.

Battery maker SES scored the largest exit of the quarter with a SPAC deal that valued it at about $3 billion pre-money. Tritium, the maker of fast-charging hardware for electric vehicles, was valued at $1.2 billion in its SPAC deal.

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