Climate tech startups are enjoying a strong year, driven by a supportive regulatory environment, high energy prices and significant investment. But despite this growth, exit strategies in the sector remain challenging.
Venture capital-backed climate tech deal value surged from $2.1 billion to $8 billion quarter-over-quarter in the first quarter, according to data from PitchBook. This growth is notable even excluding H2 Green Steel’s massive $5.2 billion round.
However, many climate tech companies are hardware intensive and therefore have a longer path to commercial scale than asset-light sectors. As a result, exit activity has been muted, with total exit value falling by more than 50% from 2022 to 2023, to $9.3 billion.
Despite these challenges, there are some promising developments: High-profile startups such as EQT Ventures-backed Northvolt and Andreessen Horowitz-backed KoBold Metals are moving forward rapidly and may be gearing up for an IPO in the near future.
Not all of today’s climate tech startups will be successful. “There will be a few outliers that will succeed,” said Katie Ray, managing partner at Engine Ventures, which backs Form Energy, a developer of long-life battery storage.
Top 10 Venture-Backed Climate Tech Companies Ready to Go Public
The list below highlights the 10 venture-backed climate tech companies most likely to go public, based on PitchBook’s VC Exit Predictor, which uses machine learning models to analyze historical and real-time data on private company exits.
Shira
Sirra makes supercharged silicon car batteries and recently raised $375 million led by Sutter Hill Ventures to complete a factory in Washington state. Mercedes plans to put Sirra’s silicon-carbon batteries in its electric G-Class SUVs by 2025 or 2026.
Arcadia
Community solar platform Arcadia secured $200 million in a Series E round in 2022, valuing it at $1.45 billion. The company’s CEO suggested this may be its final private funding round before going public. Since then, Arcadia has raised more than $200 million in development capital from investors including Macquarie Asset Management and Vista Equity Partners.
Northvolt
Northvolt, a maker of lithium-ion batteries for electric vehicles, has raised more than $10 billion in debt and equity and delayed its IPO to 2025 after initially planning it by 2024.
Vercors
French battery maker Vercors plans to raise more than €2 billion in funding from Groupe Renault, the European Investment Bank and French government subsidies in 2023 to build the first battery gigafactory.
spring
Founded in 2010, Mainspring develops linear generators that can run on alternative energy sources such as hydrogen, biogas and ammonia. In February 2024, Ray Steen was promoted to CFO.
Form Energy
Form Energy, a long-duration battery developer, plans to raise up to $500 million this year. The company has begun deploying multi-day energy storage projects in the U.S., including a 100-hour iron-air battery system in Georgia, and has received a $30 million grant from the California Energy Commission for a 500-megawatt-hour system.
Lighten
Lithium-sulfur battery technology developer Litenn closed a $200 million Series B round in September 2023 to begin shipping EV batteries in 2024.
Kobold Metals
KoBold Metals is using AI to discover materials needed for the energy transition and electric vehicles. The company recently used machine learning techniques to identify a large, high-grade copper mine in Zambia.
XPANSIV
Founded in 2016, Xpansiv operates a spot exchange for environmental commodities, including carbon credits, and provides advisory services on global carbon, energy and water markets.
Climeworks
Direct air capture technology developer Climeworks has raised the largest funding round ever for a carbon removal startup in 2022. The company completed testing of its third-generation DAC technology in early June, which can capture twice as much carbon dioxide at half the cost.
