The Future of Climate Tech 2

Countries and corporations are taking action to mitigate significant damages from anthropogenic
climate change. Over the last several years, 49 countries and 93 Fortune 500 companies have
committed to net-zero emissions targets or carbon neutrality. Even corporations whose
businesses revolve around fossil fuels, such as Exxon, Delta and GM, have made commitments to
reach net-zero emissions. In order to achieve “net-zero,” new technologies need to be developed
and scaled, including sustainable aviation fuels (SAFs), carbon capture and sequestration (CCUS)
systems and “green” cement.
Opportunities abound for companies to help deliver climate goals. Entrepreneurs are diving in to
develop climate tech solutions. Electric vehicle (EV) and alternative protein companies are early
pacesetters. Notable exits include Tesla and Rivian in the EV space and Beyond Meat in the
alternative protein sector. These successes speak to the potential of climate tech solutions to
both heal the planet and create viable, lasting companies.
Investors are recognizing the climate tech opportunity and doubling down on both fundraising and
capital deployment. US venture capital investment in climate tech companies increased 80%
between 2020 and 2021, reaching $56B. The energy and power sector experienced the fastest
growth, increasing 180% year-over-year. Non-traditional climate tech investors are quickly
exerting dominance; Alumni Ventures, Insight Partners and Tiger Global are among the most
active. A cautionary note: the climate tech sector does not come without its challenges. Timelines
for companies to scale are typically longer, talent is in short supply, infrastructure is lagging plus
inflation and supply-chain pressures are increasing the cost of operations.

Kelly Belcher
Managing Director,
Climate Technology and Sustainability

The Future of Climate Tech 3

The Future of Climate Tech 4
 Country net-zero target year All countries' 2030 emission
60 2021 policies and
reduction targets, consistent
actions track to 2.5°C
with 2.4°C of warming
to 2.9°C of warming
50
Negative consequences from climate change are All countries' 2030 emission
inevitable. The question is to what extent will the general 40 reduction targets and
populace be adversely impacted. The Intergovernmental pledges to reduce emissions,
consistent with 1.9°C to

GtCO2
Panel on Climate Change (IPCC) warns that half the 30
global population lives in areas highly vulnerable to
20
43 32% 2.1°C of warming

climate change and the climate warming above 1.5°C countries have of Fortune 500
will create irreversible damages that are a threat to set a net-zero companies have Emissions trajectory
human wellbeing. 10 target by 2050 climate targets consistent with target

In light of this, 49 countries made commitments to reach 0 1.5°C

net-zero emissions, the top three of which account for of warming
over 50% of all global emissions. These commitments -10
benefit climate technology development as they incent 1990 2000 2020 2030 2040 2050 2060 2070 2080 2090 2100
governments to create policies to reduce greenhouse
gas (GHG) emissions. For instance, the state
Washington’s emissions trading system will encourage
innovation in carbon-reducing technology.
Twelve of the world’s major oil companies,3 including
Shell and ExxonMobil, have set net-zero targets and Lending from
$5.6T Development Finance
agreed to fund emission-reducing technologies. Large
Equates to 9% Institutions
corporations are key early adopters and channel 30 GtCO2
$2.1T
partners for climate tech startups. Airlines, for example, 10%
10% Public Equity4
committed to buy sustainable aviation fuels from Emission gap
Capital Markets
from current additional financing $3.5T 22%
startups and in some cases also became investors – 22% Private Equity2
policies to 1.5°C
such as Honeywell and United Airlines’ investment in 55 GtCO2 required per year
6% Lending Private
Alder Fuels. Emissions under 26%
26% 24%
current policies 24%
Despite countries and companies setting ambitious
goals, our current policies put us on pace to hit 2.9°C of 25 GtCO2 16%
16% 21%
warming, which puts humans at risk of experiencing the Emissions increase in PE
31%
31%
severe events, such as marine ecosystem collapse and maximum to 35% funding2 required
35%
achieve 1.5°C to achieve 1.5°C
over 23 feet of sea level rise by 2100. Technology is no
21%
21%
silver bullet but is a key tool in reducing GHG emissions.
Current outlook To Reach 1.5 °C
Notes: 1) 2045: Germany. 2050: EU (27 countries), UK, Chile, Costa Rica, South Korea, Canada, US, Japan, New Zealand, Austral ia, Turkey (2053), South Africa, Argentina, UAE, Brazil, Columbia. 2060: China,
Ukraine, Russia, Saudi Arabia, 2070: India, 2) All forms of private equity including venture capital. 3) The Oil and Gas Clim ate Initiative includes BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental,
Petrobras, Repsol, Saudi Aramco, Shell and Total. 4) Equity funding from public/government sources distinct form capital mark ets. 5) Gigatons (billions of ton) of CO 2 (GtCO 2).
Source: United Nations Environment Programme, Climate Action Tracker, Fortune, IRENA, S&P Global, IPCC and SVB Analysis. The Future of Climate Tech 5
 SAFS1 Plateau will be reached in:
Reaching the Plateau
Vertical Farming 0–2 years
Battery This is when mainstream
CCUS1 Recycling 2–5 years adoption of the technology
starts. Associated risks are
5–10 years
Climate tech has matured significantly since the Climate Fintech reduced and benefit from the
“cleantech 1.0” boom. Then long, complicated and More than 10 years technology is broadly accepted.
Carbon Alternative Proteins
costly technology development cycles coupled with Market share grows.
Markets
falling natural gas prices, strong overseas competition

Expectations
Precision Agriculture
and investor short-termism meant things didn’t work
out well. Today, battery, wind and solar energy Smart Grid Car/Ride-
Wave/Tidal Power Fuel Cell Biotech Wind
technologies have achieved scale to provide power Fuel Cell EVs3 Stationary Agriculture Sharing2
at costs commensurate with fossil fuel energy. The Demand Response Power3 Inputs
advancement of these renewable energy technologies Solar PV
Alternative Packaging
has laid the foundation for many climate tech Supply Chain
Advanced Nuclear Synthetic EVs
innovations that require significant energy usage — and Logistics
Biofuels Waste to Fuel Battery Storage (LI)
a good example being green hydrogen production
or electric transportation. Innovation Trigger Peak Expectations Disillusionment Slope of Enlightenment Plateau of Productivity

Climate tech is currently at an inflection point. Nearly

all climate-related technologies existing today are
positioned to achieve scale in the next 10 years. Electric
Vehicles (EVs) epitomize the future trajectory of many
climate technologies. The enabling technology, Plateau will be reached in: 0–2 years 2–5 years 5–10 years More than 10 years Size = VC Investment
batteries, has been improved and scaled over the last
$30B
15 years. Once the battery technology matured,
Incremental technology Technology developed, but Large-scale disruption
significant Venture Capital (VC) investment ($25B since
VC Investment

improvements, significant needs to scale or overcome possible, technology is very

2017) followed, seeding a pool of fast followers to Tesla $20B disruption already occurring an infrastructure hurdle early with substantial room
(like Rivian and Lucid Motors) and generating significant for new innovation
hype along the way. The EV trend has become too big to
ignore, with nearly all major automakers following suit. $10B
Some added electric models to their lineup while
others, like General Motors, made plans to only $0M
produce electric vehicles after a certain date.
Significant progress has been made over the last two
decades, however, infrastructure and supply chains
need continued investment to scale to support this
industry transition.

Notes: 1) Carbon capture utilization and storage (CCUS); sustainable aviation fuels (SAFs); Hydrogen fuel cells.
2) Car/ride sharing excludes companies such as Uber that effectively operate as a taxi service and do not reduce GHG emission s.
Source: Cleantech Group, PitchBook, International Energy Agency, MIT 2021 Global Change Outlook and SVB Analysis. The Future of Climate Tech 6
The Future of Climate Tech 7
 Funds Closed Capital Raised Experienced Investor Count
129 247
229
117
110
In the mid- to late 2000s, funding for climate tech 104 103 141
(formerly named cleantech) increased rapidly, as 94
early-stage VCs rushed to invest in promising new
74 62
technologies. As costs of alternatives fell, like natural
22
gas and solar, growth was hard to achieve for US
cleantech companies. This led to poor returns on
investment and a reduced interest in the space. Seed Series A Series B Series C Series D
Today, we are again seeing climate tech reemerge, with
VC fundraising increasing nearly 3x and investment
increasing more than 5x between 2015 and 2021. VC
investment in 2021 was 8x the last peak in 2008 of $7B. $9B $12B $15B $9B $8B $18B $26B

Early-stage investments are dominated by climate 2015 2016 2017 2018 2019 2020 2021
tech-specific investors, whereas late-stage
investments have a high level of participation from
large, generalist investors such as Tiger Global and
Temasek Holdings. These investors have the ability
to deploy more capital at a time, so push deal sizes
higher. The median deal size for Tiger Global and Deals Capital Invested 2021 2020
Temasek Holdings in 2021 was $100M and $207M +138%
1,611 YoY Change +100%
respectively, compared to the median Series C deal
size of $52M for all investors. 1,418 1,368 9% 11% Materials & Resources $8.5B
$8.0B
11% +128%
The amount of capital required to fuel growth varies 1,185 15% Resources & Environment
+76%
by sector. For example, transportation and logistics 1,316 $6.1B
22% 16% Enabling Technologies3
requires substantial capital to develop and $5.3B
build vehicles and/or infrastructure, as typified by
Transportation $4.0B
companies like Tesla. By the time Tesla released its 19%
& Logistics $3.7B
25%
first car in July 2009, the company had raised nearly $3.0B
$950M (including $465M in debt). $2.5B
19% Energy & Power +1%
18%
$1.0B $1.0B
$14B $26B $25B $31B $56B 15% 20% Agriculture & Food

2017 2018 2019 2020 2021 Capital Deals Seed Series A Series B Series C Series D

Notes: 1) For funds with a stated focus in cleantech, agtech or electric vehicles/hybrids. 2) Investors that have done at least five climate tech deals since January 1 2017.
3) Enabling technologies are technologies, such as AI, that can be applied to climate tech challenges, but may also serve oth er industries or serve multiple industries within climate tech.
Source: Preqin, PitchBook, Cleantech Group, and SVB Analysis. The Future of Climate Tech 8
 EV Registrations Charging Stations
(Thousands) (Thousands)

6.8% 670
of global GDP required to
VC investment in climate tech is surging, but it is only Cost to Achieve
part of the climate tech funding story. While VC is Net-Zero
achieve net-zero by 2050
Concurrent Growth
Emissions by 2050: in charging stations (infrastructure)
particularly effective at funding new technologies,
significant infrastructure is needed to scale these $5.5T ~50% required for EV uptake.

new products and services. To illustrate, while VC of this would be 360

US 2008-09 infrastructure investment5 330
has played a key role in funding new EV companies, US COVID-19 300
Bailout Cost:
significant infrastructure (e.g. charging stations) is Fiscal
$498B
required for widespread EV use. Simply,
infrastructure investment must go hand in hand with
Spending6:
$5.7T
$1.6T 160
200
128
climate tech investment.
Invested in the
100 120 120 107
Energy Transition
64 85
50 45 53
The amount of infrastructure investment needed 20 5 15 19 26 34
globally can be difficult to pin down, but one estimate Global GDP (2020): $84.7T
for the energy sector alone amounts to $1.6T 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
annually. One of the largest areas of investment
needed is the electricity network, where updates
must be made to accommodate new renewable
energy and efficiency technologies.
Corporate Government Development Bank Other
Large infrastructure investments are necessary to
take full advantage of new clean energy investments, 2017 - 2019 $3B
Geothermal $24B $600B
but funding for infrastructure projects can be 1.5° scenario $509B
Marine $0B
challenging. Traditionally, bonds have been an
important funding component for large infrastructure
2021 - 2050
Biomass
$59B
$13B
$69B
$500B 3.2X
projects. The emergence and growth of green bonds
therefore presents a promising funding mechanism.
CSP $3B
$84B
36% $400B
$298B
growth since 2017, but
the level is still well
below the estimated
$22B of required investment
While governments have represented a large portion Hydro - All $269B
of green bond issuers, corporate green bond Flexibility Measures $4B
$85B is in electricity networks,
which depends heavily
$300B
$1.25T
issuances have been increasing significantly, $133B on public funding and
$200B $160B $173B from capital markets
Wind Offshore $18B typically has 15+ year
needed per year
highlighting the importance of the private sector’s $177B development timelines
to limit warming
role in infrastructure projects. Wind Onshore $80B $100B
$212B to 1.5°C

Solar PV (utility & rooftop) $115B

$237B $0B
Electricity Network $271B
$600B 2017 2018 2019 2020 2021

Notes: 1) Meta analysis of average annual investment to reach net -zero carbon dioxide emissions by 2050. 2) Historical annual av erage investments compared to those needed to meet the 1.5 C scenario.
3) Data for the US; charging stations include both public and private electric vehicle. 4) Total amount raised by issuer type ; “government” includes government-backed entity, local government and sovereign categories;
“corporate” includes financial and non -financial corporations. 5) From Mckinsey Analysis of EU (27) countries. 6) Through Q1 2022.
Source: Bruegel, International Renewable Energy Agency, Climate Bonds Initiative, World Bank, MIT Sloan, ABC Today, Internati onal Energy Agency, US Department of Energy and SVB Analysis. The Future of Climate Tech 9
The Future of Climate Tech 10
 Agriculture & Food Energy & Power Transportation & Logistics Share of Deals that are Classed as Early-Stage3 Investment from Deals: > $100M
< $100M

$20B 74% 74% 74% 70%

68% 66%
Climate tech is maturing, emphasized by the shift in 62% $16B
57% 54% 54% 56% 56%
investment over the last five years toward late-stage $15B 52%
48%
companies. New investors have entered the space as $11B $11B $11B
$10B
climate technologies have moved beyond proof of $10B $10B
concept and started generating revenues. The share $6B 43%
of deals over $100M has grown from 2% in 2017 to $4B $3B
$5B $3B $3B $3B $3B $2B
8% in 2021. Energy and power saw the largest spike $2B
in investment last year, jumping from $4B in 2020 to
$11B in 2021, driven by significant investment in $0B
nuclear fusion. The top three deals – Commonwealth 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
Fusion Systems, Helion Energy and TAE Technologies – Deal Count: 228 304 268 301 354 273 276 249 244 335 188 244 265 211 261
accounted for $2.6B of VC investment in 2021. Fusion Notable
has the potential to be a near-limitless source of clean Companies:
energy without the dangerous fissile material
byproducts. However, the tech is still a moonshot and
requires immense capital to develop. Commonwealth,
the most well-funded fusion startup, has raised $2.1B
since opening in 2017.
Energy & Power Agriculture & Food Transportation & Logistics Energy & Power Agriculture & Food Transportation & Logistics
In 2021, climate tech benefited from a strong year of
venture capital investment. Revenues generally grew 250% 120%
TTM Pre-money Valuation as of March 2022:
and valuations trended higher across all industries. 100%
However, macro trends had an outsized impact on 200%
climate tech. Upheaval in global supply chains caused 80% Early-Stage $12M $17M $20M
pain to EV startups trying to secure key inputs like 150% 75th
semiconductors. Conversely, gridlock offered 60% Late-Stage3 $90M $75M $179M
100% 66%
opportunities for logistics startups. Flexport, a freight 51% 49% 49% 42% 54% 40%
33% 36%
shipping platform, secured an $8B valuation in 50% 17% Median
February 2022, after growing revenue 154%4 during the 20%
pandemic. Russia’s invasion of Ukraine has also had 25th
0% 0%
an impact. High oil and gas prices have spurred calls 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2022
for renewables that would reduce the world’s reliance -50% -20%
on imported fossil fuels.
-100% -40%

Notes: 1) US companies with negative EBITDA and at least $1M in revenue. 2) Trailing 365 -day median of early- and late-stage pre-money valuations equal weighted between
early- and late-stage then applied 90-day trailing average to smooth index. 3) A later stage round of financing by a venture cap ital firm into a company. Late-stage is usually
Series B to Series Z+ rounds and/or occurred more than five -years after the company's founding date. 4) As reported in Time (Mar ch 2022).
Source: Cleantech Group, PitchBook, SVB Proprietary Data, Time and SVB Analysis. The Future of Climate Tech 11
 Agriculture & Food Energy & Power Transportation & Logistics Agriculture & Food Energy & Power Transportation & Logistics

500% $80M
Scaling climate technologies is challenging. Extensive
development timelines, capital intensive hardware and 400% 75th
$60M
longer sales cycles are typical. This is especially true in
280% $45M
the energy and power sector. For energy and power, 300% 75th
the majority of deals (67%) are classified as “late- 209%
191% 188% $40M $29M $30M
stage,” yet the median private VC-backed company in 166% 170%
the space only has $5M in revenue. 200% 150% 156% 160% Median
Median $20M
$16M
This is evident in the operating ratio trend. As the 25th $20M 125% $12M 25th
100%
amount of capital required to scale revenues increases 150%
so does the operating ratio, which in turn decreases 81%
the EBITDA margin. The outcome is higher cash burn 0% $0M
and a need to either raise more often and/or larger 2019 2020 2021 2019 2020 2021 2019 2020 2021 $1M-$5M $10M- $1M-$5M $10M- $1M-$5M $10M-
rounds. For energy and power companies working on $15M $15M $15M
renewable energy, EBITDA margins are sensitive to
input costs and CapEx spend, which have both been
impacted by supply chain disruptions and inflation.
Energy and power companies at the early-stage had to
raise roughly 1.5x more capital to reach the $10M- Agriculture & Food Energy & Power Transportation & Logistics Agriculture & Food Energy & Power Transportation & Logistics
$15M revenue range than their peers in agriculture or
transportation. Transportation and logistics companies Change in Median EBITDA 2021 Median 2021 Median
Margin (2019-2021) EBITDA Margin Revenue 25
had the largest step-up in capital raised (150%) to 75th
reach the next revenue threshold. This makes sense
given prototypes of vehicles can rely on cheaper off- 40% 20
the-shelf components. However, to scale, these
20% -68% $14M 13 14 13
companies must build out supply chains and make 15 12
11
substantial investments in production and logistics. 10 10 10
0%
Ensuring a healthy cash runway is critical, especially 10 Median
2019 Q1
2019 Q2
2019 Q3
2019 Q4
2020 Q1
2020 Q2
2020 Q3
2020 Q4
2021 Q1
2021 Q2
2021 Q3
2021 Q4
for industries with high expenses compared to
-67% $19M 7
-20%
revenues, like climate tech. The general rule of thumb 25th
-40% 5
is “12-18 months” cash runway, which the majority of
companies in climate tech fall below. With such a high
-60% -173% $5M 0
velocity of spend, having a strong fundraising strategy
and committed investor base is critical. -80% 2019 2020 2021 2019 2020 2021 2019 2020 2021

Notes: 1) Cohorts consist of US companies with negative EBITDA and at least $1M in revenue; smoothed using four -quarter trailing average.
2) Operating ratio defined as operating expense plus cost of goods sold divided by net sales.
Source: SVB Proprietary Data and SVB Analysis. The Future of Climate Tech 12
 25% Bubble Size: Share of Founders

20%
Management

Share of all Founders

Computer
15% Science Agriculture
Climate tech is a broad field of interest, spanning
Animal Science
advanced materials science, nuclear engineering and Clean Energy Finance
marine biology. Teams typically consist of engineers Mechanical
10% Environmental Engineering
who have spun out of large tech firms accompanied by Economics Electrical Policy/Gov Environmental Science
Biology Aerospace Forest Science
PhDs from various science and engineering disciplines Materials
aiming to build on their academic research. Then there Finance Chemical Nuclear Earth Systems & Geology
5% Physics Design Microclimatology
are oil and gas veterans who are leveraging decades of Civil Biochemical
Marketing Chemistry Biomedical Industrial Media Ocean Engineering
traditional energy industry experience to bring Automotive Energy Law Psychology Sustainability Management
0% Medicine
renewables into the mainstream.
Business 35% Sciences 25% Engineering 25% Humanities 10% Climate Specific 5%
In 2015, the ratio of US oil and gas jobs to renewables
and environment jobs was 5:1. By 2020, this ratio had
contracted to 2:1. Universities are responding to this
shift by introducing climate-specific degree programs.
In 2006, Arizona State University established its
School of Sustainability. Today, 96 universities in Private Equity
the US currently offer Sustainability Studies as a 10% Bank Debt
major. Stanford, a massive producer of budding At least one founder
entrepreneurs, is set to open a climate school in direct from academia Venture Debt
September 2022, bringing together and expanding VC & CVC
on its existing initiatives.
10% Family Offices
Philanthropy is filling a key gap between research Of founders came Government Funding
grants and private sector investment. Prime from a climate Angel Investors
tech company
Coalition uses program-related investments to fund Crowdfunding
early-stage climate tech startups that would otherwise Incubators
be too early for venture capital. Another example is Philanthropy
The Slow Factory. Founded in 2011 as a nonprofit 2.8 Friends and Family
climate innovation lab and education institute, it offers Average
University R&D
open online courses and amplify sustainability 80% founding
team size
initiatives happening across various fields. founders came Idea/Startup Development Growth Maturity
from Industry
Company Stage

Notes: 1) Analysis of a cohort of Climate Tech founders’ educational background and most recent academic degree and occupatio n.
Source: Pitchbook, LinkedIn and SVB Analysis. The Future of Climate Tech 13
 Climate Tech Companies All VC, excluding Climate Tech Climate Tech Companies All VC, excluding Climate Tech

30%
13% 13% 80% Climate tech
Climate tech solutions generally leverage so called 25% companies generally
70%
“deep tech” — technology based on substantial 11% placed in the low-to- Climate tech
Climate tech companies 20% mid valuation range
scientific or engineering challenges (like nuclear experienced far fewer companies failed
fusion). Unlike software that underlies many failures, but had difficulty 15% to reach the
VC-backed startups, deep tech solutions generally take accessing public markets highest valuations
significant time and capital to develop. In the case of through a traditional IPO 10%
climate tech, many solutions are also subject to a 5%
5%
heightened regulatory environment, which adds time
3% 3%
and cost. Furthermore, deep tech revenue models — 0%
2% 1%
mainly transactional — often aren’t as scalable as

$30M-$39M

$40M-$49M

$50M-$99M
$10M-$19M

$500M-$999M
$20M-$29M
<$10M

$100M-$499M
1%
subscription models. Many hardware companies are 0%
working around this by implementing hardware-as-a-
service (HaaS) revenue models. M&A LBO SPACS IPO Out of Still Private
Business
Based on an analysis of climate tech companies who
first received VC investment in 2017, approximately
2% fewer had exited as of Q1 2022 than the overall
tech ecosystem. A notable exception was the number
that went public via a SPAC. Public market sentiment Transportation & Logistics Agriculture & Food Energy & Power
toward climate tech has been positive, with the Energy
Transportation & Logistics Agriculture & Food Energy & Power 104
Impact Partners Climate Tech Index — which tracks
Enabling Tech Materials & Chemicals Resources & Environment
public climate tech companies — outperforming the $114B 8% IPO
NASDAQ Composite Index since 2017. An increasing The value of 32 14% Buyout
number of climate tech companies are becoming 50 climate tech
44 Notable Unicorns by Sector
unicorns, with more than a 3x increase in the number exits in 2021
61 19% SPAC
of unicorns between 2019 and 2021 adding to the 40
potential pool of companies looking to exit. In addition, 34
15
more corporates and investors adding climate tech 30 43
40
assets to their portfolios. As a result, exit activity 8
7 24
soured in 2021 with 104 exits totaling $114B, more 20 16 24 10
14 12 59% M&A
than any previous year. We expect the level of exit 5
10 6 38
activity in the space to increase as climate and ESG 25
21 22
trends come more into focus and the expectations 13
of businesses grow. 0
2019 2020 2021 2017 2018 2019 2020 2021 2021 Exits by
Deal Type
Notes: 1) US companies that raised a first venture round in 2017; out of business includes bankruptcy. 2) Companies that rais ed a first
venture round in 2017 by last private valuation. 3) VC -backed company with a $1B post-money valuation.
Source: PitchBook, Cleantech Group, Energy Impact Partners and SVB Analysis. The Future of Climate Tech 14
The Future of Climate Tech 15
 36,000
Depends on
established
151% increase in
EUA future carbon Additional emissions
carbon market
price in 20211 avoidance/reduction
2%
The majority of the carbon capture market today involves
carbon storage, in the form of nature-based solutions, Does not depend on carbon market 23% Technology-based removal solutions
which leverage Earth’s natural ecosystems to store
carbon. Without effective carbon markets, storage alone Technology is a crucial element
isn’t economically feasible. Carbon Capture Utilization 10,700 32%
and Storage will need to be a part of the solution to limit Nature-based solutions
warming to 1.5°C. Technology-based solutions have the 3,000
1,000 300 200
potential to upcycle carbon into useable products such
as fuels, chemicals, and advanced materials. These

Storage

Fuel

Chemicals
Construction

Plastics and
Biochar
42%

Recovery
Enchanced Oil
Avoided nature loss
technologies could scale to remove larger quantities of
CO2 than natural based solutions without the need for
established carbon markets.
In 2021, nearly 100 new CCUS facilities were
announced, up from just 38 in 2020. This growth is
significant especially given the challenges of funding
long-lived, capital intensive CCUS projects. However,
the estimated current pipeline of projects would
represent just 12% of the carbon capture needed to
limit warming to 1.5°C. On the bright side, VCs are $375M, Company Amount Raised Use of Captured Carbon
Solugen
recognizing the opportunity in CCUS shown by a tripling $140M $1.2B $580M Fuels & materials
of investment between 2020 and 2021. The most well- invested
funded companies in the space have found ways to $120M in 2021
make use of carbon beyond sequestration, meaning
their business models are viable without improvements
$100M 2.8X $440M Materials & chemicals
increase
Deal Size

to carbon markets. Oil and gas companies have $80M over 2020
embraced CCUS technology to offset their fossil fuel
$325M Fuel & materials
emissions and reach net-zero commitments. In 2021, $60M
Exxon proposed a $100B Gulf Coast project to capture
50M tons of CO2 per year2 – more than all CCUS projects $40M $294M Cement
currently operating. These types of large projects will
be necessary to meet the growing demand for $20M
carbon offsets (credits) as major polluters commit $214M Advanced materials
$0M
to achieving net-zero emissions.
2017 2018 2019 2020 2021 2022

Notes: 1) European Union Allowance (EUA) Between December 30, 2020 and December 30, 2021. 2) By 2030. Emissions would be capt ured from the
Houston Ship Channel and pumped beneath the Gulf of Mexico. 3) Metric mega (million) tons CO2 (MtCO2).
Source: Mckinsey, PitchBook, Cleantech Group, Bloomberg, IEA and SVB Analysis. The Future of Climate Tech 16
 Million Metric Tons
Energy Generation: Via renewables Storage & Transport:
such as solar, wind or bio fuel. Hydrogen gas is compressed Electrolyzers
660
into liquid and stored Infrastructure $.22T
Cars, boats and aircraft powered completely by Fuel Cells $.32T
hydrogen have existed for decades, but going from Production
concept to commercialization requires more than just $.56T

Forecast
perfecting the underlying technology. It needs to be 385
affordable to a large enough market segment,
Production: Energy is fed Distribution & Use:
infrastructure needs to be established to ensure ease
into an electrolyser with Hydrogen can power cars,
of use, and production of the hydrogen fuel itself needs water, spitting water into trucks, and industrial
to be sustainable. Today, over 98% of hydrogen is hydrogen and oxygen. processes like steelmaking 140 $1.4T
produced by superheating methane or coal in a process via fuel cells, liquid hydrogen 90
called steam reforming. This is called “grey hydrogen”, and hybrid engines.
2.5 3.1
unless carbon capture is used, transforming the
product into “blue hydrogen.” Another method of
2000 2010 2020 2030 2040 2050
deriving hydrogen is electrolysis, using electricity to
split water into hydrogen and oxygen. If the electricity
to do this comes from renewable sources, its referred
to as “green hydrogen.”
The infrastructure required to produce, transport,
and use hydrogen is limited. Hydrogen cars have been
commercially available in the US since 2013, but Deal Count Capital Invested

Mature
Notable Investors Hydrogen
currently only 52 charging stations exist (all located 150
in California). As part of the Bipartisan Infrastructure 143 Biofuel

Fueling Infrastructure
Law, $8 billion has been allocated for Regional Clean
Hydrogen Hubs to expand the use of clean hydrogen Lithium Ion

$7.2B
in the industrial sector. The Department of Energy’s Batteries
Hydrogen Shot program seeks to reduce the cost of

$5.5B
green hydrogen to $1 per kilogram within a decade 79
65 62
through grants and programming to align key
stakeholders. Today, according to European Energy 47
Commission, grey hydrogen costs about $1.80/kg, blue 31
$857M

$753M
$627M
hydrogen costs $2.40/kg. Green hydrogen, costs

Emerging
$147M

$212M

between $3/kg and $7/kg, a significant premium and

headwind for commercialization and adoption.3
Near Term 2020s Mid Term 2030s Long Term 2050+
2015 2016 2017 2018 2019 2020 2021
Commercial Availability
Notes: 1) Hydrogen includes companies facilitating hydrogen production, storage and transport, and distribution, fuel cells a nd components.
2) Transportation Types: Light to Heavy Duty Vehicles, Aviation, and Shipping. 3) Cost data s of July 2022.
Source: PitchBook, Bernstein, Hydrogen Council and SVB Analysis. The Future of Climate Tech 17
 Deal Count Capital Invested Notable Companies
Change Since 2015:
77% Soil Health
In Cropland Productivity3
increase in cropland 88 89
In Cropland Area productivity needed
85
by 2050 76 74
Food systems contribute one-third of global GHG Indoor Faming
emissions, from land use, on-farm emissions, and 77%
55%
pre- and post-production. The challenge is to reduce 67%
these emissions while feeding a growing global 41%
Microbiome
population with a finite amount of cropland. The 31%
solution to this problem is increasing crop yields using 20% Cropland Acreage Plateaus
more efficient and sustainable production methods.
8% 8% 8% 8% 8% Crop

$1.1B

$1.2B

$1.2B

$2.5B

$3.0B
MIT’s Joint Program on Global Change estimates that 6%
3%
a 1.5°C warming scenario requires a 77% increase 0% Protection
in output per acre of cropland by 2050.
2020 2025 2030 2035 2040 2045 2050 2017 2018 2019 2020 2021
Technology developed for the agriculture industry,
or AgTech, will play a key role in reducing GHG
emissions and conserving limited resources. For
example the development CRISPR gene editing
technology can create plant varieties that are pest
resistance and require less water. Another area is land $4.0B Precision Agriculture Fertilizer Alternatives
management where firms, like Regrow, use a mix of Farmers Business Network
$3.5B
satellite imagery and scientific models to produce Indigo Ag
real-time insights into how crops are performing. $3.0B
Partnerships with large agribusinesses give startups
$2.5B
the ability to scale using real use cases and help Apeel Sciences
corporates meet sustainability goals. Farmers $2.0B
Business Network, for example, created a service Bowery Farming
called Gradable Carbon, which allows farmers to $1.5B Agricultural Inputs Indoor Farming
Pivot Bio
bank carbon credits and later sell them through
their platform. Sound, a fertilizer company focused $1.0B
Plenty
on reducing nitrogen, partnered with Shell to study
$0.5B
how they can offset their emissions.
$0.0B
2014 2015 2016 2017 2018 2019 2020 2021 2022

Notes: 1) Change since 2015; projections from MIT’s Joint Program on Global Change “Accelerated Action” scenario.
2) Pre-money valuation. 3) Cropland productivity measured in $/unit area adjusted for inflation
Source: MIT Global Change Outlook 2021, PitchBook, Cleantech Group and SVB Analysis. The Future of Climate Tech 18
 Raw Materials Manufacturing Logistics
8% 5.1% 2%
2%
Latin America
Other Developed
3% 95% 2%

4.1B MT

4.1B MT
of global 5% North America
CAGR of
emissions come concrete market 5% Africa
of emissions of emissions of emissions
from concrete projected 7% ASEAN
production 2021-2025 7% Other Asia 479
Second to water, concrete is the most consumed 11% India

Calcination Process
material in the world. The production of cement 319
Kg CO2/ton
accounts for over 8% of total GHG emissions, and 15% Eurasia
cement

2.3B MT
2.3B MT
the market is forecast to grow around 5% a year

Fossil Fuel
between 2021 and 2025. Demand for concrete is
28 49 22

1.6B MT
highest from developing countries. China uses more 3 1 7 17

1.4B MT
cement every two years than the US used during 46% China
the entire 20th century.1

Crusher

Cooler
Raw Mill

Cement Mill
Quarry

Transport

Logistics
Kiln, Pre-Heaters
& Pre-Calcination
Yet the industry has the potential to decrease emissions
by 76% through technological innovation. The majority
of emissions from cement production (86%) comes 1995 2000 2005 2010 2015 2020 2020 by Region
from the kiln, pre-heaters and pre-calcination process,
which involves high temperature industrial heating. By
using hydrogen in this step instead of the traditional
natural gas, cement production could realize a 30%
Deal Count
reduction in GHG emissions. Other innovation in the Notable Companies
12 (Amount Raised)
green cement space include alternatives to cement GtCO2 per year Capital Invested
such as Frotera that has developed active CaCO2,
which doesn’t require the decomposition of limestone, Emissions in 2050, Current Scenario 2.9
or CarbonCure that sequesters CO2 in concrete.
$273M
While growing rapidly, VC investment in the space is
Energy Efficiency 76% 0.2 8
still relatively small. The majority of companies are still reduction 6
Alternative Fuels possible 0.3
in their development stage with nine of the 12 deals in 5
2021 receiving early-stage VC or grant financing. Given $98M
Clinker Substitutes 0.2

$25M
the scale of the task to reduce greenhouse gas 3 3 3 3
emissions, there is plenty of opportunity for startups. New Technologies 1.3 2

$12M
1

$186M
One cautionary note is the structure of the concrete

$25M

$83M
$7M
$31M
$3M
$30M

$1M
industry makes it difficult to disrupt, with a few major Alternative Building Materials 0.2 $62M
players, such as Holcim and Anhui Conch, dominating
the low-margin industry. Emissions in 2050, 1.5° C Scenario 0.7 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Notes: 1) The US produced 4.4 gigatons of cement between 1900 -1999, while China has averaged 2.4 gigatons per year since 2014.
Source: US Geological Survey, International Cement Review, Mckinsey, IEA, Research and Markets, Cleantech Group, PitchBook and SVB Analysis. The Future of Climate Tech 19
The Future of Climate Tech 20
 Fossil Fuels Share of Total Energy Supply Job years 50% of total energy from renewables by 2030
Energy Intensity (Mj/USD, PPP)1 required for 70% of total energy from renewables by 2030
Electricity Share Total Final Consumption Wholesale Trade
2%
4% Utilities
81% 79% 72% 10% All Other
of GHG emissions 21% Construction
The energy transition is underway. Governments have 62% come from energy
25% Project Development

0.4M
ambitious climate targets in place and investment in 5.4

0.4M
& Operations
the space is growing fast. Government targets are

0.7M
0.9M

0.9M
1.0M

1.2M
1.5M

1.7M
2.1M
4.5 39% Electrification
being accelerated and reinforced by geopolitical events 38% Manufacturing
3 49%
that have illustrated the fragility of a fossil fuel-
35% 22%
dependent energy system. Renewables accounted for Renewable Energy

Land Based
Offshore Wind

Distributed

Wind
Solar

Ultility-Scale
Solar
Battery Storage
Renewables Jobs Created by
81% of new energy generation capacity in the US in 26%
2021, increasing their share of total energy generation 20% 2.2 Energy Efficiency Industry
17% 1.7
capacity to 25%. If we were to reach net-zero by 2050,
electricity would need to account for nearly half of all 2010 2020 2030 2040 2050 Trend is Driven By
consumption — nearly 30 percentage points higher
than in 2020. The transition away from traditional
energy production is a contentious issue as it puts
livelihoods at risk. While not a simple transition, the
growth in renewables presents a variety of new job
types. Depending on the adoption of renewables, Economies of scale growing, Incumbents pivot to
300% Lithium, 304%
up to eight million new jobs could be created. infrastructure build-out catch-up (EV Targets)
Rapid increase in demand
Electric Vehicles (EVs) are the most recent success 250%
100% Low supply due to supply Semi Conductors,
story when it comes to changing consumer behavior to Global EV Sales, EVs2 chain pressure and raw 172%
50% 200%

6.4M
mitigate the progression of climate change. The current Number of Vehicles material bottle necks
EV Sales Molybdenum,
EV movement started in 2003 with Tesla, but has taken
150% 156%
until recently to realize crucial economies of scale and 50%
Tesla Gigafactory EV Sales
broad market adoption, forcing legacy auto makers to 100% Nickle, 90%
Begins Production
follow suit. Further growth will come with challenges. Copper, 60%
Rising costs of inputs like semiconductors, caused by 50%

3.2M
Zinc, 38%
stressed supply chains, and the speed at which key Cobalt, 33%
0.8M

0%

2.3M
0.5M

infrastructure can be built, like charging stations, 2.1M 100%

0.3M
0.1M

0.2M

could hamper progress. EVs in

2017 1.3M

Europe2 -50%

Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
2012

2013

2014

2015

2016

2018

2019

2020

2021

2022

2025

2030

2035
Notes: 1) Megajoules per dollar GDP adjusted for purchasing power parity.2) exclusively Battery EV sales.
Source: BNEF, EV Volumes. Fortune, IEA, US BLS, S&P Capital IQ, Benchmark Minerals, Yahoo, CNBC and SVB Analysis. The Future of Climate Tech 21
Dan Baldi Kelly Belcher Eli Oftedal
Market Manager, Managing Director, Senior Researcher,
Climate Technology Climate Technology Market Insights
and Sustainability and Sustainability [email protected]
[email protected] [email protected]

Mona Maitra Maya Lefelman Liz Cahill

Managing Director, Associate, Senior Researcher,
Climate Technology Climate Technology Market Insights
and Sustainability and Sustainability [email protected]
[email protected] [email protected]

The Future of Climate Tech 22

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The Future of Climate Tech 23

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The Future of Climate Tech 24

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