PitchBookPitchBook Data,Inc.EMERGING TECH RESEARCHJohn Gabbert Founder,CEOVC Investment in Climate TechResearch and EditorialPaulCondra Head of Emerging Technology2023 VC investment in climate tech fell 14.5%fromResearch2022 totalsInstitutional Research GroupAnalysisPitchBook is a Morningstar company providing the most comprehensive,mostaccurate,and hard-to-find data for professionals doing business in the private markets.John MacDonaghSenior Analyst,EmergingTechnologyjohn.macdonagh@pitchbook.comDataKey takeawaysCollin AndersonData AnalystOverall VC investment in climate tech fell 14.5%to $41.1 billion in 2023,reflectinga more challenging environment for VC investing.2021 represents the high point,with $51.0 billion in total VC deal value.PublishingQuarterly VC deal activity varied substantially during the year,reaching a highDesigned by Drew Sandersof $13.8 billion in Q3 before falling to a low point of $7.1 billion in Q4-the lowestquarter since Q2 2020.In 2023,the largest segments by total VC raised were low-carbon mobility,industry,grid infrastructure,and intermittent renewable energy sources (solarContentsand wind).Key takeawaysVertical introduction2Regulation and policy continue to be core drivers of VC activity for climatetech,though high prices for energy and fuel as well as growing demands fromClimate tech VC ecosystem market mapconsumers and investors are also influential.5Climate tech drivers12Note:This is the free edition of premium content produced by our EmergingTechnologyResearch team.As a result,parts of this version are blurred out.The full version isavailable only to PitchBook clients.1PitchBookVertical introduction"Climate tech"is a broad term,and exact definitions of climate technologies andapplications vary.This note combines two analyst-curated verticals-carbonemissions tech and clean energy-and adds climate-relevant categories from themobility and foodtech verticals to provide a broad view of the climate tech space.This analyst note is an update to our Q2 2023 Analyst Note:VC Investment inClimate Technology,and as such,we define the climate tech space as technologiesthat act to mitigate climate change by reducing greenhouse gas emissions.This excludes certain climate-adjacent areas such as land-and water-pollutionremediation,water-use reduction,and climate adaptation technologies.Climate tech VC deal activity by quarter$18700600$12500$104003002002100020182019202020222023Deal value (B)-Deal countThe following climate tech segments are included in this note:.Carbon tech:Carbon capture,utilization,and storage technologies-includingpoint-source carbon capture,direct air capture,and biological carbon removal-plus carbon accounting software and carbon trading technologies.Industry:Industrial decarbonization through alternatives to petrochemicals,low-carbon mining approaches,low-carbon metal production,andrecycling technologies.Built environment:Technologies that reduce carbon emissions from the builtenvironment,either during construction or through improvements to thepostconstruction energy efficiency of buildings.Land use:Technologies to monitor and reduce emissions from nonindustrial orcommercial land,including technologies that offer fertilizer alternatives,emissionsleak detection,and monitoring of land use changes.Intermittent renewable energy sources:Energy generation technologies reliant onsolar and wind energy,including both hardware and analyticsDispatchable energy sources:Clean energy generation through geothermal,hydropower,and nuclear technologies.Clean fuels:Generation of low-carbon fuels,including hydrogen,biofuels,andwaste-to-energy/fuels and air-to-fuel approaches.2