According to data released by Dealroom in conjunction with SAP, electrification startups are attracting the most venture capital investment in the climate tech sector.
Dealroom’s Electrification of Europe VC funding report reveals that 62% of climate tech funding between 2019 and 2024 was invested in electrification and clean energy start-ups.
The leading segments within the electrification sector include EV batteries, solar energy, green hydrogen, and battery recycling.
In 2023/2024, EV batteries segment attracted the most investment in the sector, with funding hitting $9.1bn.
Dealroom highlighted notable startups in the EV sector, including Northvolt, Nyobolt, and Electra. Swedish battery maker Northvolt raised $5 billion in early 2024 to fund the expansion of its gigafactory and is working on the development of sodium-ion batteries.
The key driver of electrification theme is the replacement of fossil fuels. The growth of EVs is an obvious example of innovation that directly replaces fossil fuels, while there are more nuanced examples in building and building efficiencies. VCs are particularly keen to invest in heat pump startups.
Marine and wave energy generation has attracted the least investment in recent years.
Nonetheless, while public market equity and other mainstream investments in the energy transition seem to be slowing down, private and venture funding remains buoyant, and there is no shortage of cash for innovations in the sector from VCs.