The state of naturetech - Naturetech report 2023

Naturetech describes technologies that support the implementation, acceleration and growth of Nature-Based Solutions so that these solutions can deliver the most effective action for nature, climate and people.
The state of naturetech - Naturetech report 2023

To help and foster different initiatives with the aim to leverage nature and power the healthy ecosystem, but also to optimise infrastructure and safeguard a stable biodiverse future, Nature-based solutions play a crucial role. Their main goal is to encompass a range of actions designed to protect, sustainably manage and restore the natural or altered ecosystems, thus providing effective and adaptable solutions which will simultaneously enhance human well-being and support biodiversity.

According to the new market analysis report, "The market for Nature Tech: Building confidence, enabling collaboration, celebrating innovation” published by Nature4Climate, along with venture capital investment firm Serena and Nature Tech membership body, MRV Collective, VC investments in naturetech startups have been developing fast over the past three years.

The report highlights that the early-stage deals rose by 130 percent between 2020 and 2022 and average deal sizes for seed to series B funding increased by 70 percent, demonstrating the growing maturity of the nature tech industry.

Naturetech growth fueled by Venture Capital funding

Even with its very important role in strengthening Nature-based Solutions, just like climatetech's role in addressing the climate crisis, naturetech cannot be the sole solution for the biodiversity crisis. Naturetech strengthens Nature-based solutions in numerous ways, and at the same time serves as a powerful enabler, particularly in quantifying, qualifying, and reporting the impacts of human activities on natural ecosystems.

The report reveals a rapid growth of naturetech stating that in 2022, VC investments were $1.56 billion, with over 162 deals.

Also, as proof of the market maturity, $7.5 billion was invested in startups over the last five years to safeguard biodiversity. Just In Europe total funding in the last five-year period was $680 million over 185 deals.

The report also highlights that average deal sizes for seed to series B funding increased by 70 percent in the last three years. On the European level, most of the investments were in these funding stages with $630 million invested in a five-year period.

Commenting on these numbers and investment growth in Nature Tech, Xavier Lorphelin, Managing Partner at Serena said:

"We are convinced that nature tech is the new frontier and will rapidly grow and reach the same level of maturity and scale as climate tech."

The opportunities and challenges of Nature Tech

The global change in economic activity toward nature-positive initiatives offers significant possibilities for providers of diagnostic, analytical, and data-rich tools and techniques. In order to maintain the trust of investors, financial institutions, and project developers, measurement, reporting, and verification are essential.

Even though Naturetech offers a lot of potential, it's critical to put safety measures in place to manage risks and guarantee that social and environmental benefits are distributed fairly. Thus, technology cost and accessibility are essential to achieving larger social and communal objectives.

The report also identifies significant market trends and discusses the difficulties in implementing potential solutions for the greatest possible financial, social, and environmental advantages. As stated, worldwide, Nature Tech not only offers the possibility of protecting and enhancing our natural environment but also has the potential to connect people within and across communities.

Lucy Almond, Chair, Nature4Climate shared:

"This report highlights the diversity and breadth of the initiatives that are underway across the globe, with much of the innovation being tailored to local and regional challenges.

"It also highlights dozens of examples and case studies of innovations, products, and concepts that have been and continue to be developed by emerging companies, eager to contribute to addressing the twinned global challenges of nature loss and climate change."

Lead image by Qingbao Meng

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