While 2023 has been a down year for startup investment in most industries, cleantech and sustainability-focused categories have held up comparatively well.

Per Crunchbase data, global investors have poured approximately $13.9 billion this year into companies working on everything from battery recycling to water-conserving crops. That puts 2023 on track to come in roughly even with last year.

Below, we charted out how global sustainability funding in 2023 compares to the prior four years, including both round counts and total investment:

In the U.S., meanwhile, sustainability-focused funding saw a sharper pullback this year, as charted below. However, cleantech hasn’t been hit as hard as many other sectors, and funds dedicated to the space continue to invest actively.

A big year for batteries

The biggest chunk of funding this year has gone to companies in the battery space. That includes several that picked up $1 billion or more in funding.

The most heavily funded is Verkor, a French startup focused on low-carbon battery manufacturing, which plans to open its first gigafactory in 2025. It raised $2.1 billion in debt and equity financing in September, including a $900 million Series C.

Another familiar name on the list is Stockholm-headquartered Northvolt. The company, which makes lithium-ion batteries with a focus on lower carbon footprint production processes, raised a $1.2 billion convertible note in late August.

Battery recycling was also big this year. Redwood Materials, the Nevada-based battery recycling startup founded by former Tesla CTO JB Straubel, picked up $1 billion in Series D funding in August. A few weeks later, Ascend Elements, a Massachusetts-based manufacturer of battery materials using elements reclaimed from spent lithium-ion batteries, secured $460 million in Series D financing.

Carbon capture and climate software

Beyond batteries, we saw invigorated interest in carbon capture and sequestration. Rising investment comes in tandem with climate data pointing to increasingly dire impacts should atmospheric carbon levels continue to rise.

Dozens of startups targeting CO₂ removal and storage applications have closed venture rounds this year. Included in the list are several working on clean concrete, with an eye to making this much-used material less carbon-intensive to produce.

To some extent, the funding surge is recognition that, given the suboptimal adoption pace of clean energy sources, there’s an urgent need for other options. Today, analyses of pathways to limit global warming to 1.5°C generally incorporate human-led efforts at carbon dioxide removal, per an IPCC report, even with hard-to-quantify risks involved.

In addition to carbon capture, we saw continued investment around the climate software theme. This is an area where we saw robust funding activity in 2021 and 2022. For 2023, we’re seeing fewer rounds of $100 million and up, but still a steady stream of financings at the intersection of software and sustainability.

Active investors not scaling back

Many of the busiest cleantech investors have also gotten more active in 2023.

This is significant given that a handful of climate-focused investors tend to dominate the ranks for deal count and total funding. Well-known names in the space, including Lowercarbon Capital, Temasek, Khosla Ventures, TPG Rise Climate Fund and Breakthrough Energy Ventures were all quite busy this year.

There’s also little to indicate they’ll be pulling back in the coming year. After all, dire climate-change projections are a key driver for investment — and those are only getting more dire. That’s not a good thing, of course, but it is certainly a motivating factor.

Related Crunchbase Pro queries:

• Sustainability-Related Funding
• Carbon Removal- And Capture-Related Companies Funded In The Past Year

Illustration: Dom Guzman