Climate technology may have a decline in the year 2024, but new data also shows a sector that is maturing with large deal sizes.

Investing in the climate technology sector fell 7% to $12.9 billion, $1 billion shy of 2023 tallyaccording to the data of a new PitchBook Report. The report found that the size of the circle increased by 2024 and investors appeared more eager to support companies emerging from their seed round.

Over the years, investors have favored early-stage companies, plowing huge sums into pre-seed and seed stage startups. That’s due, in part, to the relative youth of climate technology. After a short winter following the collapse of clean technology with the Great Recession that began in December 2007, founders and investors are also changing their approach, dealing with new markets and technologies.

That shift boosts early-stage opportunities. As startups mature, they’re starting to get bigger, later-stage rounds with higher valuations, PitchBook data shows.

In 2024, the median deal size was $7 million, up $1 million from last year, while median pre-money valuations rose to $44.5 million from $31.5 million last year. The number of deals decreased by 27% to 568. In 2023, climate technology startups raised a total of $13.9 billion in 782 deals.

Climate technology numbers from last year also reflect broader market trends. The number of deals decreased in all sectors, although the value of the deal was closer to the 2023 level mainly due to strong investments related to AI in companies such as Anthropic, Databricks, OpenAI, xAI, and Waymo, which collectively captured 43.2% of all deal value in Q4 .

The slowdown in climate technology investments comes as investors nurse a hangover after the excitement of the pandemic era. As venture dollars have flowed into climate technology (and many other sectors), deal sizes, numbers, and valuations have all increased.

Now, as some of those early-stage companies look to rise again, they are facing a harsher environment where investors look closely at unit economics. Those startups that struggle struggle to scale, while those that crack the code are rewarded with bigger deals, investors tell me.