Venture-capital firms last year invested a record $17.7 billion in so-called carbon-tech businesses-or developers of technologies that monitor carbon in ecosystems, capture and store carbon dioxide and help reduce emissions in buildings and industrial processes, according to PitchBook.
That represented a roughly 24% increase from the $14.3 billion invested in 2022, the private market-data provider says.
“The carbon and emissions tech vertical has been resilient to the challenging market conditions in overall [venture-capital] investment since 2022,” when interest rates began to rise, PitchBook says.
It adds regulation is boosting demand for carbon-tech technologies, but “pressure from investors and consumers can also drive corporate decarbonization efforts, particularly for sectors perceived to be significant emitters of carbon.”