Watershed, a climate technology company, raised a $70 million Series B round that produced a $3 billion valuation of the XNUMX-year carbon measurement and management company. How many other climate tech companies are already unicorns?
There are currently 43 unicorns dedicated to climate and environment:
Source: HolonIQ, rating by Pitchbook
La weather tech is a rare but growing breed of unicorns. Of today's 1000 unicorns, the 43 in climate tech represent 4,3% of the total (vs. fintech at about 20% or internet software 18%). But since last year the birth rate of climatic unicorns has increased dramatically. 29 climate tech companies achieved unicorn status in 2021, representing more than 60% of all-time climate unicorns and ~6% of new unicorns overall that year. Big weather tech valuations were so high in 2021 that they even outperformed the broader market, with newly minted weather tech unicorns growing at a 625% growth rate compared to the industry benchmark growth of 287%.
Younger climate tech companies are accelerating unicorns much faster. Not only has the number of weather tech unicorns been rapidly expanding, but the emergence of new unicorns is shrinking. Nearly 60% of climate tech unicorns in 2021 achieved the coveted $1000B status in less than 7 years, which is the standard for startups. Startups founded after 2017 steadily grew to become unicorns in 4 years or less, notably accounting for 40% of all 2021 climate tech unicorns. While high valuations for climate unicorns indicate a hot market , also contrast with the poor performance of climate technology publics through SPACs, which have mostly trended below the $10 base price year to date. Relaxing public markets and less attractive SPAC supply will likely incentivize hot weather tech companies to stay private longer and produce more unicorns.
Watershed brings more software adding carbon to the climate technology mix. Despite companies' inclination toward software as a service, climate technology has veered more toward hardware over the years. The latest Series B funding of $70 million from Watershed it puts B2B carbon software on the map and potentially heralds other software and carbon combinations entering the unicorn club. But both software and hardware will be critical to deep decarbonization, with "software to guide company strategy and capital deployment, and hardware to build the chemical and physical infrastructure needed to change today's industries," as he put it. Nathan Bullard.
Climate tech unicorns concentrated in the most emitting sectors and geographiesyes Similar to the distribution of climate tech venture capital in 2021, more than 80% of climate unicorns fall into the top three categories of energy (35%), food and agriculture (33%), and mobility (16%). ). Climate unicorns also appear in geographies with the largest emissions indexes, with 95% of unicorns coming from the US (60%), Europe (21%) and China (14%).
