The State of Climate Tech 2020: PwC

The State of Climate Tech 2020: The next frontier for venture capital

The world of venture capital has seen huge changes over the past decade. Ten years ago there were fewer than 20 known unicorns¹ in the US; there are now over 200². Annual investment of global venture capital has increased more than fivefold over the same period, rising to US$264 billion by 2019. This investment has been dominated by the tech sector harnessing digital frontiers to disrupt traditional industries - including cloud computing, mobile apps, marketplaces, data platforms, machine learning and deep tech³. It is an ecosystem that acts as the birthplace for innovation and brands that can shape the future of consumerism, sectors and markets.

As the COVID-19 pandemic has taken hold of the world, the question of whether venture capital, and early stage investing more broadly, is backing and scaling the innovations our world really needs has never been more pertinent. Life science and biotech investing is an asset class perhaps most resilient and relevant to the short-term impact of COVID-19, but there is another impact-critical investment area that is emerging as an increasingly important investment frontier: climate tech.

This research represents a first-of-its-kind analysis of the state of global climate tech investing.

What is climate tech investing?

“Climate tech” encompasses a broad set of sectors which tackle the challenge of decarbonising the global economy, with the aim of reaching net zero emissions before 2050. This includes low-to-negative carbon approaches to cut key sectoral sources of emissions across energy, built environment, mobility, heavy industry, and food and land use; plus cross-cutting areas, such as carbon capture and storage, or enabling better carbon management, such as through transparency and accounting.

^{1. A Decade of ‘Unicorns’ Ends With a Little Less Magic (WSJ, 17 Dec 2019)2. MoneyTree Report (PwC/CB Insights, Q2 2020)

3. The Decade in Technology and Venture Capital: Looking Back on the 2010s}