How is climate technology recession?

As the historic boom in technology investment fades, and the world looks into a potential recession, how much will green technology suffer? Activity in the sector has slowed: the number of contracts fell from an average of 80 to 61 per month in 2021. Despite the high temperatures, Northvolt, Octopus and Rimac have announced big rounds this summer.

Gather industry experts to discuss changes in the environment Sifted Pro Roundtable – Monthly industry networking forums for the pro community – following our latest Statements of study On carbon capture and compensation.

How worried should climate tech founders be?

Not particularly, it wasn’t a convincing answer. Climate technology is a growing industry in Europe: Last year, investors invested $10bn, up from €5.4bn in 2020.

That said, investors in 2010 They’re sure to be more selective than they were in the 2021 primary — and experts tell us funding rounds will take longer to close this year.

It’s not a repeat of 2008: green tech is better for climate reduction this time

Climate technology is less vulnerable now than it was in the dark days of the 2008 recession, according to a unanimous group opinion.

In the year Following the 2008 crash, green investment has taken a big hit. But now there is increased urgency to wean the world off fossil fuels, with net zero targets looming large. “We don’t have the luxury of time anymore,” said one participant.

There’s also a clearer path to wealth: there were 16 European climate tech unicorns at the end of last year, with 11 entering the 2021 paddock, according to Dealroom data.

Expect M&A growth

More than half (58%) of the participants expect significant growth in the company’s packaging this year – a good thing, some argued, because it will create larger and more competitive operators.

“Now there are no winners among them [many] rooms [in Europe]But as these sectors mature, we will see more MA&A activity,” said an attendee.

“It’s still an early stage, and fundamentally undervalued,” said another. “People don’t understand how big these markets can be. We’re not talking billions of dollars, we’re talking billions of dollars,” he said.

Knowing that carbon offsets actually reduce carbon

There is an ongoing struggle, especially when looking at the world of carbon tracking. Check out all the latest and greatest technology claims that pop up every month.

Without proper ways to measure a company’s performance, “we risk another bubble where all capital expects non-climate-impact solutions,” said Participant.

No reliable and quantifiable measure of this technology will make it “hard.”[er] To get corporations closer to the market and help scale, the expert added.

Founders, Don’t Panic: Fundraising Tips

First, be patient. “Now more than ever, you need to be clear about your market positioning, how you measure up to your competitors and where your customers are coming from,” says one expert.

Shop around. “Of course, everyone wants to collect the money [VC firm] Sequoia,” said another participant. But founders should avoid the mistake of being too selective and instead approach more investors. “Get on Dealroom and start compiling a list of VCs beyond the usual suspects,” added another.

Finally, brace yourself for the wait. Fundraising will certainly take longer than in previous years as investors move their chips cautiously.

Feeling FOMO? Join our next roundtable on Scaling Deep Technology in Europe on 30 September. Participants must be registered Pro members. Not part of the community yet? Apply here.