<aside> ✍️ At Eurazeo, we’ve been committed on Climate for many years. We are one of the only players in the Private Equity & VC space who has committed to achieve zero net carbon by 2040, in alignment with the Science Based Targets initiative.
On the investment side, we have been investing in Climate for more than 10 years, especially through our Venture and Growth practices. We have been able to see the ups and downs and the recent tremendous growth of the space.
In the last few years, we have entered a new era for Climate tech: the rising awareness around climate change, the government support and the better clarity we have on the new emerging opportunities have spurred a wave of investments into the venture capital markets. We share with you today our understanding, learnings, and vision on this as-hype-as-important investments sector.
We have written a series of six articles, publishing one article every week starting in February 2023 on the following topics :
Wishing you an insightful reading,
Raphaël Cattan, Alexandre Dewez, Maryam Mahla, Charlotte Pratt & Henri Courdent.
PS: You are a climate company at Seed or Series A, operating in Europe and curious about how Eurazeo can help you ? Please reach out on Linkedin or drop us an email ar [email protected], [email protected] or [email protected]
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2022 was a tough year for venture capital, with Q3 global funding decreasing by 53% yoy. But in the midst of this gloomy outlook, climate remains a silver lining: **1 in 4 dollars of VC funds** deployed in 2022 went to Climate Tech, with an increasing number of dedicated funds and new GPs investing in the space.
This growth is timely and much needed: The Intergovernmental Panel on Climate Change (IPCC, or GIEC for French readers) recommends that at least investments in climate action should be multiplied by a factor of 3 to 6 annually to limit global warming to 1.5°C. This means that investments in climate transition should increase to about 2.2-4.5 trillion per year by 2030. **This represents a huge opportunity for private investors and entrepreneurs willing to contribute to the effort and seize the opportunity.
But what does Climate Tech exactly mean ?
If one refers to its strict definition, Climate Tech is understood as technologies that are explicitly focused on reducing GHG emissions, or addressing the impacts of global warming :
Climate Tech is therefore very heterogeneous: it addresses various technologies, a large variety of sectors (primarily those who are the most carbon emissive today such as Energy, Mobility, Food, the Built Environment, New Materials and Industrials), of business models and of types of companies, from deep tech to software and tech-enabled models. It also encompasses companies which scale of impact is very different: carbon management softwares, charging stations and green cement don’t have the same scale, ambition and timing of impact.
A couple of numbers to summarize the growth of this trend in the last few years: