FEATURE
We expect more money to fund climate companies this year than ever before .
Penetration of tech-enabled businesses into traditional sectors remains embryonic , in a similar way to the internet during the dotcom crash of 2000 . The rush for corporates to reduce costs likely means even greater investment into supply chain technologies , and even more into e-commerce . it ’ s by no means doom and gloom . Inevitably , any market takes some time to settle after a shock . But we are already seeing a shift that will become more pronounced for the balance of 2022 and beyond . Larger financings and
M & A will inevitably increase , both in parallel , as financings will tier towards ’ safer ’ bets – either larger private companies , which will likely get even more investor attention or mid-size private companies that are already positioning for leadership in space or geography .
Climate-related sectors are showing very strong growth in capital raised , and we expect more money to fund climate companies this year than ever before . These sectors present exactly the decade-long ‘ secular ’ bet that investors love to back . Technology companies are increasingly providing solutions to many of the problems the world faces , such as climate change , water scarcity and pollution management , and this trend will only accelerate .
Overall , valuations for companies that balance growth and profitability are remaining far more resilient than highgrowth , high-burn businesses and already we see capital paying more attention to balanced business models . Those companies that can show a clear and credible path to profitably will attract even more interest .
We believe the tech sector will begin to ‘ tier ’ into those segments and business models which will attract a much greater share of the US $ 2 trillion that must be invested in the coming three to five years ( the typical investment period for a fund ) and , of course , others which will struggle . Overall , we are incredibly bullish on the prospects of real ‘ winners ’ emerging from the last few easy funding years . And there is more , much more , than enough capital already raised to back them to success . �
36 www . intelligentfin . tech