Despite a turbulent year for VC investment, new data shows that built world tech demonstrated notable resilience in 2024, outperforming wider markets and achieving triple-digit growth in sub-sectors that are vital to the fight against climate change.
Globally, built world tech attracted $21.1bn in 2024 until early November and is forecast to end the year with $24.3bn.
According to the latest State of Built World Tech report, published by noa, Europe’s largest built world VC investor, electrification, robotics, grid technology, and clean energy saw surges in investment. In the midst of a global funding downturn, built world tech saw a smaller fall in venture capital investment of 7%, outperforming sectors like fintech (-18%) and broader climate tech (-23%).
The sector’s resilience was driven by continued demand for decarbonisation solutions and strength in particular sub-sectors.
Total electrification investment was up 10%, driven by a 40% increase in venture funding for grid technologies.
Grid congestion has become a bigger issue against a backdrop of soaring global electricity demand, which is set to double by 2050.
Meanwhile, building electrification hardware and installation has seen a 30% drop in funding, due to tailwinds created by the European energy crisis and regional electricity market reforms in 2023 not being carried out as expected.
Overall, investment in industrial automation grew 61%, driven by a 895% jump in building operations robotics.
AI advances across the economy have drastically reduced the cost and time to market of robotics manufacturing and the built world is now seeing positive economics for robotics in building operations and renewable energy construction.
Resilience in built world tech investment stems from the continuing urgent need to invest in technologies to help countries reach a net zero built world by 2050, through energy efficiency, electrification, and retrofitting of existing buildings.
The built world represents ~40% of all CO2 emissions and it will simply not be possible to meet wider climate targets without decarbonising the built world. Targets for decarbonisation across the US and Europe alone will see over 9 million green jobs created across buildings, industrials and the grid by 2030.
In 2024, Europe continues to wrangle with an inconsistent regulatory landscape. For example, Germany saw first the removal, then reinstatement, of generous incentives for residential retrofits, while the UK delayed its phase-out of gas boilers in new builds to 2035. Both policy shifts led to declines in funding for associated technologies.
“Built world tech is at the forefront of our fight against climate change, and the sector has continued to attract investment, even in a challenging funding environment,” Gregory Dewerpe, founder and managing partner at noa, said.
“Technologies like grid electrification, labour upskilling, and robotics are essential to reshape industries and to achieve our decarbonisation goals. At noa, we’re proud to support the innovators leading this charge and recognise that sustained, long-term investment is crucial to overcoming the hurdles ahead, including regulatory changes and evolving market economics.”
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Deal sizes in built world tech companies increased across the board in 2024, despite lower deal volumes.
Although median deal sizes for Seed, Series A, and Series C rounds have been growing faster in Europe, the US continues to lead with the largest median deal sizes across all funding stages. European Series B median deal size growth was also slower in Europe than in North America (127% vs 152%).
American built world firms raised 7x the $1.9bn capital raised in the UK, Europe’s largest hub for built world tech investment.
The US also accounts for ~80% of the funding of two of the best performing sectors: industrial automation and risk management. In fact, the US dominates every theme in built world technology.
While the UK has seen a decline in built world funding, London remained the top city globally in terms of deal count and third for investment, ahead of New York and San Francisco.
A large part of the UK’s success stems from owning 16% of global capital allocation for the growing grid tech sector, by far the UK’s largest theme in 2024. London has particular expertise on power procurement and capacity management, thanks to the UK’s advanced electricity market design. Australia, Switzerland and France all saw increases in capital raised.
There are now four European hubs in the top 10 global ranking of cities for built world tech investment: London, Berlin, Paris, and Stockholm.
