A new report has revealed a听rise in funding and M&A activity for businesses fuelling the sustainability听agenda.听
Technology advisory and investment firm听GP Bullhound鈥檚听Impact investing and the rise of sustainable tech听report听showed听impact technology companies are receiving a fast-increasing amount of private equity investment.听听
As the sector matures, those raises are becoming larger and focused on later-stage companies.听
Analysing听more than 10,000 fundraise transactions and 3,000 M&A transactions, starting in 2015,听the report found听that impact companies raised record levels of investment in Europe and North America in 2020 鈥� breaking $10bn for the first time.听
It also highlighted how听funding for impact companies has increased by 51% in 2020, while听the average size of funding rounds increased by 80% in听2020.听
There were听a number of听notable mega-rounds ($100m+) in key impact sectors in 2020.听Ecovadis听and Back Market $100m+ rounds stand out as large rounds in fast-growing ESG analytics and refurbishing sectors.听
Software companies have dominated funding rounds in this sub-sector 鈥� making up 45% of all impact investment activity.听
M&A activity for impact companies also saw a record year in 2020 鈥� reaching $69.8bn, with听four听mega–deals representing $36bn.听听
Khosla Ventures and Bain capital听were听revealed as听investors with impact policy most active in sustainable tech,听for early stage and later stage companies,听respectively.听
GP Bullhound鈥檚 report听also听explores the technology sectors that are benefiting most from the climate transition and sustainable development agenda, as well as听highlighting听the key drivers.听
鈥淚t鈥檚 becoming increasingly clear that impact investing and the backing of companies that are fuelling the sustainability agenda, is the way forward and the market will only grow from here,鈥� said听Guillaume Bonneton, Partner at GP Bullhound.听听
鈥淭he figures speak for themselves 鈥� capital is fast moving into sectors that will define our economic future and help accelerate the climate transition.听听
鈥淎t GP Bullhound we are convinced that the tech ecosystem will play a major part in making our planet greener, fairer and safer, and it鈥檚 imperative that we see the current investment trends continue.鈥澨�听