Israel’s State of Climate Tech 2022 - Update

Growth Map of Climate Tech Domains

An analysis of the growth rate of startup companies for any particular challenge is shown in Figure 5. The figure depicts the percentage increase in the number of startup companies over the last 3.5 years (2019-H1 2022), the size bracket of the total number of startups in the challenge and the total known investments per challenge.

Alternative Proteins, the third most funded challenge domain in 2021, is expected to continue to grow and may take top place in total investment in coming years. Cluster 3 – early emergence – includes a group of challenges, each with less than 50 startups and varied stages of matureness. Circularity and Novel Materials both show steady growth in number of startups, and Transparent & Agile Supply Chains displays a continued high growth in new companies. However, investment growth is still limited to date. Cluster 4 – new arrivals – includes Carbon Capture & Utilization and Carbon Management, Risk & Finance, two challenges that have attracted founders that have followed the global interest in these domains, and in which opportunities are expected only to grow. Both challenges, which are distinctly different in their tech drivers, include a very high percentage of young companies, but are still in early stage of investments. Significant growth in these two domains is likely, yet it will probably take a few years.

The challenges are grouped into a number of clusters with similar characteristics.

Cluster 1 – established fields – consists of Sustainable Mobility & Transport, Clean Energy Systems, and Climate Smart Agriculture, challenges with the greatest number of startups, the largest total funding sums over time, and steady investment growth. Cluster 2 – rapid growth – includes the Alternative Proteins and Green Construction challenges that have raised increased capital over the last year, validating our anticipation in our previous report that the quick rise in these new companies would lead to accelerated investments.

Figure5 | GrowthMapof ClimateTechDomains

N ew A rri v als

90%

Number of startups

Car b on Capture & U tili z ation

150

Car b on M anagement , R is k & F inan c e

100

80%

25 50

Built Environment Materials & Manufacturing

E arl y E mergence

70%

R apid Growth

Land Use Digital

60%

T ransparent & A gile Supply C h ains

A lternati v e P roteins

50%

G reen Constru c tion

Cir c ularity

40%

F oo d L oss & W aste

N o v el M aterials

E sta b lished Fields

30%

Sustaina b le M o b ility & T ransport

L o w Car b on B uil d ings

% of Young Companies (0-3.5 years)

Climate Smart A gri c ulture

Clean M anufa c turing

20%

Clean Energy Systems

E c o-Ef fic ient W ater I nfrastu c ture

10%

0

500

1000

1500

2000

2500

T otal I n v estment ( M U S D )

Israel’s State of Climate Tech 2022 Update