SANTA CLARA, Calif.,
July 13, 2021 /PRNewswire/
-- Silicon Valley Bank (SVB), the bank of the world's
most innovative companies and their investors, today released
its Future of Climate Tech report. This report analyzes
the trends in venture capital investing, fundraising and exits that
are shaping climate tech and helping to address the significant
risks of climate change.
"As the dangers of climate change have become clearer and the
technologies aimed at reducing these impacts have matured, more
investors and entrepreneurs have turned their attention to climate
tech," said Kelly Belcher, Managing
Director of SVB's Energy & Resource Innovation (ERI) practice
and author of the report. "While the effects of the climate crisis
are sobering, we are optimistic about a sustainable future based on
the innovations and technologies we see coming to market and the
capital being committed to the sector."
Key highlights from the report include:
- Venture investment in climate tech is on track for a record
year. SVB anticipates $58B of capital
invested by the end of the year, beating out the previous record of
$35B set in 2020. In the first four
months of 2021, nearly $30B was
invested in climate tech companies.
- Similarly, venture fundraising for climate tech-focused funds
is on track to hit a record $26B this
year, as environmental, social and governance (ESG) factors have
become a priority for limited partners in venture capital funds.
Today, the typical climate tech fund takes a year to close, five
months less than the industry average.
- Climate tech companies are taking advantage of the popularity
of SPACs and leveraging the vehicle for liquidity and capital. SVB
anticipates $35-40B will flow to US-based, VC-backed climate tech
companies through SPACs in the next 24 months.
- Food and agriculture saw a slight boost (four percentage
points) in revenue growth in 2020 compared to 2019, but many
climate tech companies in the transportation and energy categories
were exposed to lower revenue growth (48 and 44 percentage points
decrease for transportation and energy respectively) like much of
the rest of the global economy due to decreased consumer demand
from the pandemic. As demand waned, companies placed greater
emphasis on expense reduction and management in these
verticals.
- Climate tech companies tend to be far more capital intensive
than most tech companies and require innovative financial
instruments to provide low-cost capital to asset-intensive business
models such as robotics, infrastructure, energy and transportation
companies. Many companies are gravitating toward a
hardware-as-a-service model by deploying units under long-term
contract vs. a one-time sale and are searching for cost-effective
ways to finance this model.
Climate tech encompasses sectors focused on technologies and
business models to mitigate climate change:
- Renewable Energy & Infrastructure
- Mobility
- Food & Agriculture
- Water & Air
- Waste Management
- Energy Transition
SVB's Energy & Resource Innovation practice partners with
innovators whose passion and purpose lie in building businesses to
develop sustainable resources and protect our planet. SVB delivers
access to a foundation of banking and financing solutions and a
team with decades of industry experience.
SVB will host a live webinar with Kelly
Belcher to discuss the report and the future of the climate
tech industry on July 13, 2021 at
10:00 a.m. PT with Milo Werner, Partner at Ajax Strategies,
Mona Maitra, Managing Director at
Silicon Valley Bank, and Lafe
Vittitoe, Managing Director at Silicon Valley Bank. Register
for the live event here.
Read SVB's Future of Climate Tech report here:
bit.svb.com/climate-tech-report
About Silicon Valley Bank
For nearly 40 years, Silicon Valley Bank (SVB) has helped
innovative companies and their investors move bold ideas forward,
fast. SVB provides targeted financial services and expertise
through its offices in innovation centers around the world. With
commercial, international and private banking services, SVB helps
address the unique needs of innovators. Learn more at svb.com.
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SOURCE Silicon Valley Bank