In 2022, investments in technology to address climate change were brought to public attention.
In contrast to the ebbing of venture capital and the plummeting valuations of industries such as eGrocery and food delivery, climate tech investment has stayed at record highs, according to PWC's State of Climate Tech 2022 report.
Data from AgFunder shows that agrifood and climate tech startups have raised $3 billion in venture capital deals.
Climate tech is an expansive domain, usually embracing ventures aimed at decreasing the carbon footprint of the global economy. This covers a range of aspects in agtech, from ag biotech and alternative protein to new farming methods and vertical farms.
The agricultural sector has a critical role to play in mitigating climate change, as the sector contributes 19-29% of total greenhouse gas emissions. In order to reverse the damage from climate change, a commitment from all involved in the agrifood value chain, including downstream customer-facing sectors, is necessary, as noted by McKinsey.
VC activity in the climate tech sector of agrifood is primarily targeting upstream startups in 2022. As the industry matures, there may be an opportunity to move downstream.