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Investors poured $2.2b into Israeli climate tech companies in 2021 — report

Annual investments up 57% from $1.4 billion in 2020, according to Israeli organization PLANETech

Ricky Ben-David is The Times of Israel’s Startups and Business editor and reporter.

Illustrative: Global warming. (Chonticha Wat; iStock by Getty Images)
Illustrative: Global warming. (Chonticha Wat; iStock by Getty Images)

Israeli climate tech companies drew more than $2.2 billion in investments over the course of 2021, 57 percent more than in 2020, according to PLANETech, an Israeli nonprofit innovation community focused on climate change technologies.

The organization said this week that Israeli climate tech companies were wrapping up a record year for investments in the sector, in line with overall record investments in Israeli companies in 2021.

“By the end of 2021, the annual investments in Israeli climate tech companies reached $2.2 billion, exceeding last year’s fundraising record of $1.4 billion by 57%,” said Uriel Klar, director of PLANETech, on Tuesday.

Climate tech is an umbrella term that includes technologies for clean energy, transportation, water treatment, food manufacturing, waste reduction, and supply chain improvements.

Klar told The Times of Israel that the figures for 2021 were “pretty exciting” and that the world was seeing a “global movement toward climate technologies.”

He cited a recent report by consulting multinational PwC that showed that investments of venture capital and private equity into global climate tech companies reached $87.5 billion between June 2020 and June 2020, an increase of 210% from the same period the previous year when $28.4 billion was invested in the sector.

PLANETech released a comprehensive report in October on the Israeli climate tech landscape, identifying 637 companies in the sector, the majority of which were founded in the past seven years. The report noted that Israel has a vibrant and growing climate tech sector, but companies in this space faced acute challenges such as regulatory barriers and venture funding obstacles.

Klar said that since late October when Prime Minister Naftali Bennett told world leaders at the UN’s COP26 climate conference in Glasgow that Israel would channel its efforts to fight climate change by leveraging its technological creativity, the local sector has experienced an exceptional few months.

The COP26 conference was considered one of the most important climate summits in history and came amid increasingly severe weather worldwide and dire warnings about the world’s future.

Klar cited recent significant developments such as Israeli food tech company Future Meat, a developer of cultivated chicken, lamb, and beef, raising over $300 million last week — the largest single investment in the cultured meat sector — and cleantech company UBQ Materials, a maker of bio-based products converted from waste, nabbing a $170 million investment to build a large-scale conversion facility in the Netherlands next year. This too was one of the largest investments in the cleantech sector to date.

“In addition to the two investments in Future Meat and UBQ Materials…, SolarEdge has become the first Israeli company to enter the S&P 500 index and [weather platform] Tomorrow.io [formerly ClimaCell] is going public on the Nasdaq at a $1.2 billion valuation,” Klar said in a statement.

In Glasgow last month, Bennett and Microsoft co-founder Bill Gates agreed to establish a working group between the State of Israel and the Gates Foundation in the area of climate change innovation, following a meeting they had on the sidelines of the COP26 conference.

“Israel is known as the startup nation, and I think that it’s time we pivot and channel our national energy — which is the energy of the people, the brainpower — to fighting climate change,” Bennett told Gates during the meeting. “We’re going to take this as a national mission.”

Klar said it was encouraging for the sector that the Israeli government appeared to be on board and that “we’re only going to see the results from COP26 in the coming months.”

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