Climate tech startups are experiencing a robust year, driven by supportive regulatory environments, high energy prices, and significant investments. Despite this growth, exits in the sector remain challenging.
According to PitchBook data, venture capital-backed climate tech deal value surged from $2.1 billion to $8 billion quarter-over-quarter in Q1. This growth is notable even excluding the massive $5.2 billion round by H2 Green Steel.
However, the hardware-intensive nature of many climate tech companies extends their path to commercial scale compared to asset-light sectors. Consequently, exit activity has been subdued, with total exit value dropping by over 50% from 2022 to 2023, reaching $9.3 billion.
Despite these challenges, there are promising developments. High-profile startups like Northvolt, backed by EQT Ventures, and KoBold Metals, supported by Andreessen Horowitz, are rapidly advancing and may be gearing up for IPOs in the near future.
Not all current climate tech startups will succeed. “We’re going to have a few outlier winners,” said Katie Rae, managing partner at Engine Ventures, which backs Form Energy, a long-duration energy battery storage developer.
Top 10 Venture-Backed Climate Tech Companies Poised for Public Offerings
The following list highlights ten venture-backed climate tech companies with high potential for going public, based on PitchBook’s VC Exit Predictor, which uses a machine learning model to analyze historic and real-time data on private company exits:
SILA
Sila manufactures supercharged silicon car batteries and recently raised $375 million led by Sutter Hill Ventures to complete a plant in Washington state. Mercedes plans to offer Sila’s silicon carbon batteries in its electric G-Class SUVs by 2025 or 2026.
ARCADIA
Arcadia, a community solar platform, secured $200 million in a Series E round in 2022 at a $1.45 billion valuation. Its CEO indicated this might be the last private financing round before going public. Since then, Arcadia has raised over $200 million in development capital from investors like Macquarie Asset Management and Vista Equity Partners.
NORTHVOLT
Northvolt, a lithium-ion battery manufacturer for electric vehicles, has raised over $10 billion in debt and equity. The company, originally planning an IPO by 2024, has postponed it to 2025.
VERKOR
French battery manufacturer Verkor raised over €2 billion in 2023 from sources including the Renault Group, the European Investment Bank, and French government subsidies to build its first battery gigafactory.
MAINSPRING
Founded in 2010, Mainspring develops linear generators that can run on alternative sources like hydrogen, biogas, and ammonia. In February 2024, Ray Steen was promoted to CFO.
FORM ENERGY
Long-duration battery developer Form Energy plans to raise up to $500 million this year. It has begun deploying multi-day energy storage projects in the US, including a 100-hour iron-air battery system in Georgia, and received a $30 million grant from the California Energy Commission for a 500-megawatt-hour system.
LYTEN
Lyten, a lithium-sulfur battery technology developer, closed a $200 million Series B in September 2023 to start shipping EV batteries in 2024.
KOBOLD METALS
KoBold Metals uses AI to discover materials necessary for the energy transition and electric vehicles. It recently identified a large, high-grade copper mine in Zambia using its machine-learning technology.
XPANSIV
Founded in 2016, Xpansiv operates a spot exchange for environmental commodities, including carbon credits, and offers advisory services on global carbon, energy, and water markets.
CLIMEWORKS
Climeworks, a direct air capture technology developer, raised the largest round ever by a carbon removal startup in 2022. In early June, it completed testing of its Generation 3 DAC technology, which can capture twice the carbon dioxide at half the cost of its previous version.