Venture capital has grown increasingly aligned with climate goals, pushing for energy options that minimize pollution. From 2019 to 2022, investment in clean energy surged sixfold, reaching 12.3 billion dollars, a shift highlighted in Oliver Wyman’s Clean Energy Initiatives Radar. This stands in stark contrast to a broader market slowdown driven by higher interest rates and tighter liquidity, which led to a 53% decline across sectors. The rise of large-scale, mega-investments—each topping 500 million dollars—also marks the era.
Industry observers point to two main levers behind the surge in green proposals. First, European policy fostering the energy transition, paired with incentives like the U.S. Inflation Reduction Act and similar industrial supports. Second, the sheer deal size that venture capitalists are willing to back. Oliver Wyman notes that the average deal size more than tripled, moving from 17 million dollars in 2019 to 53 million in 2021, before stabilizing in 2022. Larger rounds often reflect startups that have progressed to more advanced development stages.
interest in batteries
Within the clean energy scope, battery technology attracted growing attention from investors. In 2022, batteries accounted for about two-thirds of global energy venture funding, totaling around 5 billion dollars. Large-scale, decentralized storage is viewed as a cornerstone for energy independence, and the capital allocation mirrors that belief. The sector’s stake has roughly tripled—from 1 billion dollars in 2021 to 3 billion dollars in 2022.
Hydrogen also received strong support. Between 2019 and 2022, funding for hydrogen technologies rose from roughly 70 million to around 550 million dollars. Carbon capture and storage gained momentum as well, especially when used to convert gray hydrogen into blue hydrogen by capturing emissions. In 2022, investment in this area reached about 600 million dollars, compared with roughly 100 million three years earlier.
Europe, second investor in clean energy
By region, the United States led clean-energy investments with about 7,000 million dollars in 2022, aimed at decarbonizing the economy. Europe trailed, with about 3,500 million dollars, as inflation pressures and rising interest rates weighed on funding. Together, the two regions accounted for roughly 85% of global clean-energy financing.
China ranked third, expanding its commitment from 300 million to 700 million dollars in three years, backing firms involved in batteries, renewable energy technologies, and energy efficiency. In 2022, China increased its stake by more than 71% to about 1,200 million dollars as the country accelerated its shift to renewables. Other Asia-Pacific players, including Japan and Australia, participated actively, contributing around 1.7 billion dollars in total—nearly 14% of the previous year’s total.