Overview of Sightline Climate report findings

Just dropped: our 4th (!) annual Climate Tech Investment Trends report. These are the charts that I’ll rely on throughout the year to predict where the venture market’s going and piece together what happened in 2024… aka the new normal. Tl;dr 2024 wasn't the launchpad investors had hoped for. The slow rollout of IRA funds, political uncertainty in the US & EU, plus low oil prices and high interest rates meant stalled projects and few corporates and investors willing to buy. But the uncertainty is mostly over. Generalist infrastructure & growth funds are tapping climate as a key sector, and the capital is there to back this next generation of climate tech. 🚀 Record number of 178 exits. 92% acquisitions, most of which were tuck-in deals without disclosed valuations. 6 IPOs, with 2 in emerging markets. 📈 Graduation rates rose, reversing a downward trend that started in 2022. 25% of companies raising money progressed to a later stage. 🤝 Deal count was flat. But with increases in later stage deals as sectors mature. 💼 The investor pool stabilized. Fewer new and departing funds signals that the climate tourists have moved on. ⚡ Clean firm power and data centers top mega deals. Vs the hey-day of Northvolt and Redwood Materials $750M+ rounds, 2024’s largest deals were $500M. Read this report as a double click into the early-stage ecosystem, alongside our Capital Stack report which includes infrastructure & growth equity asset classes. So meaningful to see this report improve year over year, as CTVC grows. Kudos to Julia Attwood, Maria Guerrero Quintana, Kim Zou, Mark Taylor, and the whole Sightline Climate (CTVC) team for continuously raising the bar.

Sightline Climate (CTVC) is back with another data-packed 2024 trends report. Here are my highlights: 💰 Investment Cooling, But Not Crashing: $30bn was invested in venture and growth investments last year. That's something to celebrate. Growth is shifting from exponential to linear. ⚡ Mega-Deals Shift to Data Centers & Clean Firm Power: Clean energy and data centers are trending. Specialist technologies like small modular reactors (SMRs) or long-duration energy storage (LDES) are attracting significant investment. See IM Motors Scala Data Centers and Crusoe. 📉 Growth Stage Funding Takes a Hit: Large growth-stage deals plummeted 38%, impacting overall investment. Early-stage (Seed) investment remains stable, while Series B saw some large, outlier deals. We've been seeing a lot of bridge rounds. 💥 Nuclear & Energy Storage Rebound: After a dip, nuclear and energy storage investments have surged, reclaiming a significant portion of total energy investment. 🔋 Batteries, solar and industry saw a massive drop. Solar bankruptcies increased due to changes in net-metering policies. High-profile bankruptcies in the transportation sector also impacted investor confidence, and Northvolt is still in limbo. ✈️ Transportation Shake-Up: While auto investment remained relatively stable, battery investments plummeted, and aviation saw substantial growth. 🤝🏻 Exits Surge, Primarily Acquisitions: Exits more than doubled, driven by acquisitions (92% of all exits). IPOs increased slightly, but SPACs have significantly declined. Many acquisitions were undisclosed, suggesting smaller outcomes. 🛢️ Oil Majors Active Acquirers: Oil and gas companies continue to acquire renewable energy and energy transition companies, though their long-term strategy remains unclear as they keep backpedaling their climate commitments in parallel. Ending on a happy note - - Since the start of 2020, ~3,900 climate tech companies have raised $182bn+ of venture funding across over 6,200 deals. 🌱 Well done to all the hardworking climate tech entrepreneurs out there - and to the Sightline team: Kim Zou Sophie Purdom John Tan Mark Taylor

Our latest Sightline Climate (CTVC) newsletter is out — exploring the $3.7bn in cancelled clean energy project funding from OCED, and what it means for the sector ⬇️ What’s been hit: 🧱 $1.3bn in low-carbon cement (Brimstone Energy, Heidelberg Materials, Sublime Systems, National Cement Company) 💨 $665m in carbon capture/CCS (Sutter CCUS, Calpine Texas, TDA Research, PPL Corporation, Research Triangle Institute) ⛽ $631m in hydrogen and low-carbon fuels (Exxon Mobil, Orsted Start P2X, Technip) - and more. At Sightline, we’re constantly tracking clean energy and industrial projects to help our customers understand the pace — and roadblocks — of climate transition technology deployment. 🧵 A few key takeaways in the newsletter, and more on the platform for clients: - Low-carbon cement got hit hard — projects lost 94% of federal support for the sector under the Biden DOE's Industrial Demonstrations Program. - FOAK developers now face costlier capital markets — and growing incentives to go abroad. - And yet, there’s one silver lining: permitting just got easier. The Supreme Court narrowed NEPA scope last week, reducing friction on project timelines. But permitting without capital is an empty win. This is a pivotal moment. If you're an investor, policymaker, or industrial partner trying to understand the fallout — and where opportunity still exists — we're here to help. 📊 Our clients are already exploring the shifting deployment landscape on the Sightline platform. If you’re not one yet, let’s talk: https://lnkd.in/eCwTMAE2 But wait, there's more in this newsletter: Sophie Purdom’s fund closing (!), new job opportunities from our job boards, the biggest venture and debt deals of the week, and more: https://lnkd.in/e3G545HR . . . . . #Decarbonization #CleanEnergy #IndustrialPolicy #ClimateTech #OCED #MarketResearch #FOAK #DOE #InflationReductionAct #EnergyTransition #CleanManufacturing #SustainableFinance #GreenHydrogen #CarbonCapture

👉 Innovation is a driver of transformation and climate tech is essential for a clean energy transition. ✍ Sightline Climate (CTVC) in the report - The Climate Capital Stack and New Funds - highlights climate tech capitalization trends in in 2024 👉 It reports on – who’s raising funds, where capital is concentrated, and tracks the following: • The state of climate funds – the capital raised to invest in climate tech and fundraising trends to understand sentiment around climate tech. • Dry Powder – the undeployed capital looking for the right opportunity- ready-to-go capital for early or late-stage climate solutions. • The Climate Capital Stack – those who have raised the funds and want to put it to work - the types of capital available, at what stage, from whom. ✍ Highlights: - $164bn of private AUM across 334 new VC, Corporate VC, Growth, infra, and private equity funds with a full or partial climate focus closed since January 2021. -96 new funds have been raised in 2024 so far – down 6% from 2023’s record, but still maintaining momentum and exceeding 2021 and 2022 - $47bn in fresh capital closed YTD – up 20% from 2023, when new funds raised $39bn. - $86bn of dry powder ready to deploy for climate (down 8% from 2023’s high of $93bn) from VC, Growth and infra funds. Newly-included infrastructure funds making up the bulk of the powder ($56bn). - 21 mega-funds (≥$500m) so far this year – down 19% from 2023 but playing an increasingly important role, accounting for 80% of all new AUM. - - 23% increase in mid-sized funds ($125-500m). 38 funds have closed in this bracket, up from 31 funds last year. Funds in this mid-sized AUM bracket have been on a steady rise YoY since 2021.  👉 Read detailed insights in the report. High-Level Climate Champions Mahmoud Mohieldin Sagarika Chatterjee

There is a seismic shift in how capital is flowing into climate solutions.🫣 ... 💎The latest insights from Sightline Climate’s 2024 report reveal a few insights for you as investors and founders to know: 🎙️ 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 👨🌾 🚀 𝗔𝗨𝗠 𝗚𝗿𝗼𝘄𝘁𝗵: New climate Assets Under Management (AUM) surged by 20% year-over-year, reaching a staggering $164 billion since 2021. Mega-funds like TPG and Brookfield are leading the charge. 🚀 𝗗𝗿𝘆 𝗣𝗼𝘄𝗱𝗲𝗿 𝗔𝗰𝗰𝘂𝗺𝘂𝗹𝗮𝘁𝗶𝗼𝗻: The investable dry powder for climate investments stands at $86 billion. Despite a slight decrease, investors are deploying capital more cautiously due to market uncertainties. 🚀 𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗙𝘂𝗻𝗱𝘀 𝗧𝗮𝗸𝗲 𝗖𝗲𝗻𝘁𝗲𝗿 𝗦𝘁𝗮𝗴𝗲: Infrastructure funds now account for nearly 60% of new climate AUM raised in 2024, signaling a move towards more mature investments. 🚀 𝗦𝗵𝗶𝗳𝘁 𝗶𝗻 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗲𝘀: Early-stage venture funds are experiencing a pullback, with a 9% decline in new climate-focused VC funds between 2023 and 2024. Growth Equity and Private Equity are stepping up, focusing on proven business models. This is good for the Climate deep tech, especially. 𝗧𝗵𝗲 𝗖𝗹𝗶𝗺𝗮𝘁𝗲 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗦𝘁𝗮𝗰𝗸 𝗶𝘀 𝗲𝘃𝗼𝗹𝘃𝗶𝗻𝗴:🌽 The report highlights the evolving climate capital stack, which includes: • Venture Capital (VC): Early-stage innovation • Growth/PE: Investing in growth-stage or mature companies • Infrastructure Funds: Long-term infrastructure investments • Banks and Insurance: Providing financial services and risk coverage 𝗪𝗵𝗮𝘁 𝗗𝗼𝗲𝘀 𝗧𝗵𝗶𝘀 𝗠𝗲𝗮𝗻 𝗳𝗼𝗿 𝗨𝘀?🍒 In 2025, the focus is shifting from First-of-a-Kind (FOAK) investments to the first Ten-of-a-Kind (TOAK), emphasizing scalability and commercialization. The “missing middle” of capital remains a challenge, but dedicated climate funds are here to stay. 🎉How do you see these trends impacting your business or investment strategies in the coming year? What are your favorite Cliamte funds that have dry powder?

As the climate capital stack evolves, 2025 promises both challenges and opportunities for investments in the sustainability transition. Based on insights from Sightline Climate (CTVC)'s Investment Trends, here’s a snapshot of what happened in 2024 and what to expect for 2025. 📈 𝐀𝐔𝐌 𝐆𝐫𝐨𝐰𝐭𝐡 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬: climate funds saw a robust 20% growth in AUM in 2024 - still below 2022 peaks, but signals a positive trend, with mega-funds returning to market after successful first rounds. 💰 𝐃𝐫𝐲 𝐏𝐨𝐰𝐝𝐞𝐫 𝐏𝐢𝐥𝐞𝐬 𝐔𝐩: Uninvested capital remains significant, but deployment began picking up late last year. 🏗️ 𝐄𝐧𝐭𝐞𝐫: 𝐈𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐟𝐮𝐧𝐝𝐬: Notably infra funds are moving towards emerging energy and other climate tech, such as sustainable power and data centres. These are seen as safer plays compared to the volatility of early-stage VC which previously dominated the market. 🏢 𝐒𝐞𝐜𝐭𝐨𝐫 𝐅𝐨𝐜𝐮𝐬 𝐒𝐡𝐢𝐟𝐭𝐬: Investment in energy and the built environment surged, driven by nuclear energy, storage, and data center expansion. Transportation investment, slowed largely due to cooling in the battery market. 🔄 𝐄𝐱𝐢𝐭𝐬 𝐚𝐧𝐝 𝐂𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐢𝐨𝐧: 2024 marked a record year for exits—more than doubling from prior years—largely driven by acquisitions and industry consolidation 🔍 2025 𝐓𝐡𝐞𝐦𝐞𝐬 𝐭𝐨 𝐖𝐚𝐭𝐜𝐡 - Expect continued growth in climate AUM and increased deployment across safer, infrastructure-focused plays. - Consolidation will remain a key theme, with more acquisitions shaping the competitive landscape. - The ongoing "scale gap" persists, emphasizing the need for capital to help promising technologies bridge the leap to commercial viability. Where do you see the biggest potential for impact in this rapidly shifting space? 🌍 #sustainablefinance #climatetech #venturecapital #infrafunds