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Corporate impact fuels $7.5 billion surge in nature tech investments

In the world of nature tech startups, an impressive $7.5 billion in investments has materialised over the past five years. This growth is intimately tied to the escalating emphasis on corporate impact reporting, a phenomenon that has been a boon for entities in the MRV (Measurement, Reporting, and Verification) and biodiversity credit sectors, which are now among the most rapidly expanding categories.

Corporate impact fuels surge in nature tech investments_close up on a bird in a wheat field_visual 1Close-up of a bird in a wheat field.

Comparing this momentum to the broader tech landscape reveals that while nature tech is thriving, it still occupies a relatively modest niche. In 2022, the collective investment in climate tech firms reached an impressive $41 billion, underscoring the nature tech sector's smaller yet flourishing presence.

A consistent investment pattern has been observed over the past three years, with yearly sums surpassing $1.4 billion. However, these figures have seen fluctuations in both the quantum of investments and the number of deals struck.

Read more: World Economic Forum to create a Biodiversity Credit Buyers Club

The geography of these investments highlights a focal point on the USA, with a staggering $5.8 billion channelled into nature tech startups. Following suit, Europe, Asia, and Oceania have contributed significantly, though to a lesser degree.

Within the realm of funding categories, food and agriculture claim the lion's share, with most of the investments reserved for later-stage ventures. A notable revelation is the remarkable growth of MRV and biodiversity credit segments, with a jaw-dropping 763% increase between 2018 and 2022. This dynamic ascent is exemplified by an upswing from $53.4 million in 2018 to a noteworthy $305.5 million in 2022.

Read more: Carbon pricing: global solutions for a global challenge

Investing in nature tech companies attracts a diverse set of investor types, encompassing experienced climate or agri venture capitalists, nature-focused niche firms, small VC entities, family offices, and real asset investors assuming strategic positions within the sector.

While promising opportunities have emerged, as epitomised by the Taskforce on Nature-related Financial Disclosures and the Science-Based Targets initiative, the report calls for heightened transparency in environmental impact reporting, validated through peer review.

Breaking free from these challenges and exploring alternative partnerships and capital sources beyond traditional VC and startup routes may be the key to unleashing the full potential of the natural tech sector.

DGB Group collaborates with enterprises and investors, enabling their participation in the rapidly expanding global nature market. Our core focus resides in developing and implementing extensive nature-centric initiatives, including reforestation, afforestation, and energy-efficient cookstove projects, to rejuvenate the environment. Our offerings cater to a diverse range of stakeholders, including large corporations, small businesses, government bodies, and individuals. Our primary goal is to empower businesses to invest in environmental preservation and attain carbon neutrality. To embark on your environmentally conscious journey, you can start by assessing your ecological footprint or talking to our dedicated team to explore personalised solutions aligned with your specific needs.

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