Figure 61. Clean Tech Investments Over Time by Deal Type

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Investments appear to be going into less mature startups. Later stage startups have only seen 28 percent of their 2021 funding through the first half of 2022, but every other category is on pace to raise more money this year. Early stage firms (those in their first two series of funding) have already raised 84 percent of the investment they raised in 2021, and firms that have just received seed funding are at 82 percent. This could be related to competition—some large investment funds have embraced early-stage investment in response the growth of venture capital (VC) as an asset class.¹⁹⁸
The least-mature companies have experienced the most dramatic growth, albeit on a small base. Last year, 25 companies housed at California incubators and accelerators raised a total of $2.59 million in funding. This year, 10 such companies have already raised $3.39 million. They include three exciting firms housed at Y-Combinator: Alga Biosciences (a green agriculture firm) AirMyne (which is developing a CO2 scrubbing device), and Impossible Mining (which is developing an underwater robotic recycling system). The passage of the Inflation Reduction Act (IRA) brings subsidies for carbon capture and hydrogen production that might possibly incentivize more innovation in these very young sectors.

¹⁹⁸ Cameron Stanfill and Kyle Stanford, US Ventura Capital Outlook: H1 Follow-Up