Source: Pitchbook.
Analysis by Beacon Economics
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- While VC deals in California clean tech were, on average, considerably smaller in 2022 than in 2021, the 2021 figures were driven higher by a few very large investments. However, while there were fewer larger deals in 2022, there was an increase in activity in smaller deals. For all deals smaller than $500 million, there was an 18 percent jump in VC investment in 2022, compared to 2021. For deals of less than $10 million in value, the same amount of investment was made in 2022 as in 2021. For all other deal size categories ($10-$100 million, $100-$250 million and $250-$500 million), the amount of VC investment in 2022 was either the highest or second-highest on record. By contrast, there were no clean tech deals of greater than $500 million in 2022—compared to five in 2021. Absent larger deals coming to the market, and reduced investor appetite for larger deals, there were more resources to invest in smaller deals in 2022.
- As these figures suggest, 2022 was characterized by smaller clean tech deals than was the case in 2021. In 2022, the average VC deal size stood at $29.5 million, compared to $50.2 million in 2022. In 2023 through August, the average deal size was $40 million. The largest deal in 2022 would have ranked as the sixth-largest deal in the state in 2021, and the largest deal in the state in 2022 was seven times smaller than the largest Clean Tech deal in the state in 2021.
- UPSIDE Foods, a Berkeley-based company, which is developing laboratory grown meat, received the largest clean tech investment ($400 million) in the state in 2022. The second-largest clean tech investment in the state was made to Veev, a company which has developed techniques in the sustainable construction of homes.
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