Climate Tech Software Q4 update: More funds! More growth!
The climate tech software industry continued its strong momentum in Q4 2021. Startups raised a total of USD 183 million in funding—the second-most raised in a single quarter. The industry also posted QoQ growth rates ranging from 3% to 41% across various growth indicators and startup matrices. We also identified 13 key partnerships and six product updates in Q4 across our 52 climate tech software disruptors.
Two climate tech startups to watch out for this year are Persefoni and Patch. Persefoni is yet to disclose any specific plans; however, having raised close to USD 111 million in the last year, we expect the company to step on the growth accelerator in 2022. Patch, on the other hand, has several initiatives up and running. Having onboarded several high-profile customers last year, the company is looking for a European expansion in 2022. The two companies’ joint carbon offsetting marketplace is also something to look forward to.
Solutions that monitor and measure supply chain emissions are in high demand. This trend could bode well for pioneers in this space like EcoVadis. However, startups like Sinai Technologies, Circulor, and Provenance are also actively expanding in this space. Blockchain technology continues to make inroads into the climate tech software space through tracking emissions and tokenizing offsets. We expect blockchain-based startups like Nori to continue their robust growth.
The strong money flow into the industry is also likely to continue. The industry is known for shorter gaps between funding rounds (358 days on average in 2021), so, startups that completed pre-seed or seed rounds last year are likely to step up funding in 2022. Finally, as the industry heats up, we expect more incumbents to enter the climate tech software space, following in the footsteps of Microsoft and Siemens.
Q4 2021: Nine companies raise a total of USD 183 million in disclosed funding. This was the highest-funded quarter for the industry since the record-setting USD 208 million raised in Q1 2020 (which included a massive USD 200 million private equity raise from EcoVadis).
Sweep, CoGo, Normative, Klima, and Plan A were the other startups that raised USD 10 million or more during the quarter. Sweep and Plan A also raised seed funding earlier in the year. Pawprint and Ecologi raised funds through crowdfunding campaigns; both exceeded their initial funding targets. Pawprint’s crowdfunding campaign was its second during the year.
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