Clean Tech Innovation

California’s clean technology startup industry continues winning more venture capital than firms the world over—even as the world economy gets more volatile. Even, against the backdrop of higher inflation, higher interest rates, and snagged supply chains, firms in the state are on track to raise more capital than any year before 2021. While the state is on a slower investment pace than last year, this is largely attributable to a decline in megadeals. Deal volume is up through the first half of the year, driven by investments in smaller and less mature firms. The passage of the Inflation Reduction Act (IRA) and the resilience of venture capital as an asset class are promising signs, as the state enters the second half of the year.

All estimates contained within are current as of July 31, 2022. They are based on a thorough analysis of Pitchbook deal data for clean tech companies, performed at that time. In this study, clean tech firms are identified based on keywords assigned to Pitchbook companies by the platform.

Clean Technology Investment in California
  • California clean tech firms raised $14.7 billion in 2021, based on a final accounting of activity that year. This was 87 percent more investment than had been raised in 2020.

  • Through the first half of 2022, clean tech raised $9.3 billion—more than any year prior to 2021, when $14.7 billion was raised.

  • With 112 deals completed, deal volume has been greater in 2022 than it was at this point in 2021. The state is raising less money per deal, with an average deal size of $41.5 million versus last year’s $67.6 million.

  • The large amount of investment in 2021 appears to be driven by a very small number of billion-dollar-plus transactions, especially in mobility.

  • California remains the center for clean tech venture capital, with three out of five dollars invested in the U.S. invested in California.

California Clean Technology Mergers and Acquisitions, Entrances and Exits
  • The clean tech exit rate was down 39 percent compared to 2021, and no California-based clean tech firm has exited via initial public offering (IPO) so far in 2022.

  • Lower exit rates in the state are consistent with national trends. Exits overall and IPOs did not maintain their remarkable 2020 levels and appear to have been afflicted by macro uncertainty as the economy recovers after the COVID-19 pandemic.

California Clean Technology Investment by Stage and Segment
  • The nature of clean tech investment appears to be changing terms of maturity. The year-over-year dip in investment is entirely driven by late-stage firms, while incubated and seed-funded firms are on pace to raise more money than last year.

  • Investment in mobility through the first half of 2022 was only 1.6 percent of what it was last year due to fewer megadeals and fewer deals overall.

  • On the other hand, investments in solar through July 2022 were 84 percent of the total in all of 2021.

  • In terms of average deal size, there have been fewer megadeals for mobility and built environment companies and more for carbon tech and energy efficiency, which has led to more parity between these sectors.


193 Thorne, James. “Here’s what climate tech investors think of the Inflation Reduction Act.” Pitchbook. August 5, 2022. Available at:

194 Penrod, Emma. “Venture capital interest in solar, energy storage is soaring in the first months post-Inflation Reduction Act.” Utility Dive. October 18, 2022. Available at:

195 “Inflation Reduction Act (IRA) Summary: Energy and Climate Provisions.” Bipartisan Policy Center. August 4, 2022. Available at:

196 Thorne, James. “Here’s what climate tech investors think of the Inflation Reduction Act.” Pitchbook. August 5, 2022. Available at: