Chart: Investors showered climatetech startups with a record-smashing $40B in 2021

Mobility, energy, and food and water were the hottest draws for VC dollars.

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There’s never been a better time to be a climatetech startup or a venture capital investor in the sector. U.S. startups in the space raised a total of $39.2 billion across 605 venture deals in 2021, according to the intrepid researchers and analysts at Climate Tech VC.

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The pace of investment actually accelerated in the second half of last year compared to the same period in 2020, with a cool $23 billion flowing into climatetech startups in those six months. As one keen analyst sagely observed, The road goes on forever and the party never ends.”

Three sectors (mobility, energy, food and water) accounted for approximately 90 percent of all U.S. climatetech funding in 2021, according to CTVC’s reporting. The mobility sector had the largest median deal size (in the ballpark of $20 million per deal) and snapped up 40 percent of total funding. 

The surge in investment activity in the mobility sector was driven by massive rounds directed into electric-vehicle and battery builders such as Northvolt and Rivian, while research-heavy fusion energy startups such as Commonwealth Fusion Systems and Helion landed eye-popping rounds from a crowded investor pool.

Roughly 1,400 investment firms participated in at least one climatetech deal in the U.S. in 2021.

For a little historical context, VCs directed $8 billion into cleantech investments in 2008 and 2011, in what were record years at the time during previous cleantech investment bubbles.

Climatetech wasn’t the only sector setting investment records in 2021. The global venture-capital asset class as a whole pulled in $621 billion in combined deals last year, according to CB Insights in its State of Venture 2021 report released earlier this month. And while climatetech may have overperformed, it was financial technology, or fintech, startups that won the most VC attention, accounting for $132 billion raised in 202121 percent of all venture dollars.

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Eric Wesoff is the editorial director at Canary Media.