Israel’s State of Climate Tech 2022 - Update

Introduction Accelerated Growth of Climate Action 2021 - 2022 ‘Israel’s State of Climate Tech 2021’, a collaborative report written by the Israel Innovation Authority and PLANETech, and the first report to portray the climate tech ecosystem of any nation, was published a few weeks prior to COP26. The year since has been one of accelerated activity across the full array of stakeholders in positions to drive decarbonization and climate resilience, both globally and in Israel. The COP26 Glasgow Climate Pact commitments resonated with greater conviction to accelerate action on climate this decade. These included the demand that countries set targets to meet the 1.5°C goal, the pledge to reduce methane emissions and halt deforestation, re-commitments to increase financial support to low- and middle-income countries, as well as alignment with net zero goals from large financial institutions, members of the Glasgow Financial Alliance for Net-Zero. Israel, for the first time, declared its commitment at COP26 to net zero by 2050, and Prime Minister Bennet shared in his speech his vision of transforming Israel from ‘Startup Nation’ to ‘Climate Innovation Nation’.

The impact of this in accelerating the growth of climate technologies is striking. The number of new ventures and growth-stage climate tech investment funds established is proliferating, the funds raised by climate-focused funds are multiplying, and in parallel, dollar investments and the number of rounds in climate tech startups are climbing. In numbers; at the closing of 2021, annual VC climate-tech investments summed to over $40 billion over 600 deals, with funding rising ~20% sequentially for each quarter of 2021, and dollar investments in H1 2021 doubling compared to the equivalent period in 2020. 1,2 In H1 2022, climate tech startups raised around $19 billion across 500 venture deals, 3 despite a period of decline in overall venture market funding 4 . Approximately 70 new climate venture firms were announced during 2021. Climate tech investments are prominent in the overall VC market, accounting in 2021 for US$0.14 cents of every VC dollar, 5 and despite the downturn of the overall tech market in early 2022, deep investments in climate tech are expected to continue. 2 Israel’s government is also slowly stepping up its climate commitments, with a Climate Bill having passed its first reading. Furthermore, NIS 3 billion have been approved for the establishment of a climate tech program, which includes defined steps for promoting technological solutions dealing with climate change based upon findings from the 2021 report. In all respects, the Israeli climate tech ecosystem has experienced accelerated growth over the last 12 months. This is reflected in the activity of startups, incubators and accelerators, investors, as well as a growing number of founders, entrepreneurs and skilled professionals exploring and seeking new opportunities in the field. This 2022 report update analyzes the growth in ‘Israel’s State of Climate Tech’ over the past year, reflecting and comparing to the previous findings from 2021, and portraying an evolvement of the Israel ecosystem that parallels the global growth.

The 6 th IPCC reports were also published this last year, providing scientific evidence for climate change, the current and future impacts on ecosystems and society as well as developments in mitigation efforts towards attainment of long-term emissions goals. The deepened commitments and the sense of urgency following the Glasgow Climate Pact and the IPCC reports have sped up the pace of climate policy and action globally.

1 https :// www.ctvc.co / 40b-2021-climate-venture-recap /, 2 Pitchbook, Emerging Tech R esearch, Climate Tech R eport, VC Trends and Opportunities, Q 1 2022 . 3 https :// www.ctvc.co / 19b-2022-midyear-update / retrieved September 202 2 4 https :// www.emergingtechbrew.com / stories / 2022 / 07 / 25 / a-flight-to-quality-here-s-how-climate tech-vcs-are-shifting-focu s 5 Pwc, State of climate tech report, 2021, Scaling breakthroughs for net-zero

Israel’s State of Climate Tech 2022 Update