Planetary Tech March Madness
Principal
Planetary Tech March Madness
A 2024 investment prediction tournament, in review
By Kathryn Meng
February 4, 2025
Last year, our Planetary Health team at RA Capital convened investors from 25 of Boston’s leading climate tech firms for our own version of March Madness: a tournament that pitted subsector against subsector, established players against emerging innovators.
The challenge? Predict which planetary / climate tech subsector would have the most successful 2024. Well, it’s the moment we’ve all been waiting for. The results are in!
But first, let’s talk about how we defined and quantified success. When we convened in March 2024, naturally, our analytical peers’ first question was about metrics, too. We came prepared with a framework and, in true collaborative spirit, refined it through group input on variables (dollars invested, deal count, exits, total exit values) and weightings.
We evaluated a comprehensive range of sectors: alternative proteins, agricultural biotechnology, aquaculture, solar generation, water purification, and beyond. The bracket included everything from brine recovery to building materials, DAC to e‑fuels, energy storage to geothermal. We separated hydrogen transportation/storage from production, distinguished between nuclear fusion and fission, and covered metals recycling, methane inhibition, and routing optimization.
Our bracket seeding strategy deliberately avoided subsector clustering to encourage broader cross-industry conversations. Rather than grouping similar technologies together (such as placing all energy generation methods in one quadrant), we opted for a straightforward alphabetical seeding system, incorporating write-in candidates at the bottom (robotics and spacetech were our write-ins). This approach proved valuable — it sparked unexpected discussions between disparate sectors early in the process, while still naturally preserving some fascinating matchups, such as nuclear fission versus fusion and the pairing of hydrogen transportation and storage with hydrogen production technologies.
The initial bracket was populated with just the subsectors (written in navy below), and the winners of each head-to-head are noted in green (and special recognition goes to Bernard Lupien of Rhapsody Ventures, whose bracket most closely predicted our group prediction).
2024 Group Prediction Bracket
Avoiding groupthink
I can hear the skepticism: “A room full of investors predicting hot sectors? Classic groupthink.” But that’s not what happened.
Instead, we witnessed fierce, nuanced debate. Subsector champions emerged, as did thoughtful critics. The discussions were electric – even investment teams found themselves internally divided. We challenged our individual biases, acknowledging when our personal enthusiasm for specific technologies might not reflect broader market potential.
Our collective prediction? Artificial intelligence and efficient computing would lead the pack.
“Too broad!” you might say. “AI for what? And isn’t AI’s energy footprint a planetary health concern? Isn’t efficient computing an entirely separate category?” These were exactly the debates we had. Our conclusion: in climate tech, AI and efficient computing are inextricably linked. Any successful planetary-scale AI application must be built on efficient computing infrastructure – they’re two sides of the same coin.
And the winners are …
Now, with 2024’s data in hand, we can answer a crucial question: How good is our collective insight at predicting market trends?
The Final Four came down to AI/efficient computing, energy storage, hydrogen production, and robotics (a great write-in addition from our friends!). The championship match? AI/efficient computing versus hydrogen production.
The numbers are (mostly) in for 2024, and they tell a fascinating story. While our bracket predictions feature some impressive home runs (see check marks), the market threw us a few curveballs that we whiffed at (x marks the spot). It is at this point that I ask the discerning reader to pardon the mixed baseball and basketball metaphors — I know much about climate, less about sports.
As a disclaimer: company, investor, and acquirer reporting is imperfect; not all rounds may be disclosed, round and exit data may be missing valuations, investment, and acquisition amounts, and not all 2024 year-end results are in, but we’ve got enough market data to see the general trends.
2024 Performance vs. Group Predictions
AI and efficient computing delivered exactly the breakthrough year we anticipated. The numbers speak volumes: AI-focused climate tech startups secured over $6 billion in just the first three quarters of 2024, commanding 14.6% of total climate tech investment – nearly doubling 2023’s full-year figure of $5 billion (7.5%). 2024 ended with a bang with Crusoe Energy Systems announcing a $600 million Series D at a $2.8 billion valuation in December. The company specializes in developing environmentally-optimized data centers and AI computing infrastructure, with a particular focus on capturing and repurposing stranded energy sources for powering their operations. Their innovative approach helps reduce methane emissions while meeting the growing demand for AI compute resources.
Hydrogen production validated its finalist status through a (second? third?) renaissance. The sector’s fresh focus on geologic hydrogen sources and supporting solutions (e.g., prospecting and advanced separation technologies) demonstrated the market’s appetite for scalable clean hydrogen solutions. However, hydrogen production did not perform as well as expected. Although it did make it into the top 10 based on dollars invested (~$1.2B), the sector just barely made it into the top 50% based on deal count and exits. Keep reading for thoughts on how investment cycles may play a role here. Koloma secured $295 million in Series B funding to support its work in geologic hydrogen exploration and production. Koloma and its peers aim to prove that geologic hydrogen can provide a more scalable, sustainable, and cost-effective alternative to manufactured hydrogen.
Energy storage maintained strong momentum throughout 2024, capturing nearly $3B in investment (and counting). This growth reflects the increasing recognition of storage as critical infrastructure for the integration of intermittent renewable energy sources. Form Energy (developing iron-air batteries for multi-day energy storage) and Sila Nanotechnologies (silicon anode materials to improve energy density and performance of lithium-ion batteries) attracted significant capital in 2024, raising $405 million in a Series F, and $375 million in a Series G, respectively.
Robotics showed particular strength in Q4 2024. The sector’s integration with AI for applications like extreme-weather agricultural operations positions it for significant growth in 2025.
Some sectors didn’t get their time to shine in our dialogue by nature of the bracket composition, but that’s how the chips fell. The EV charging segment lost early on to energy storage, but was right on its heels this year with $2.1B+ in investment and 200+ deals. This investment is well supported by a 25% increase in EV sales, shutting down naysayers who claim that the EV market is slowing down. Other sectors like alternative proteins that were not expected to have strong years saw a great deal of investment ($1.6B+), though critics may question whether this volume of investment was based on sector bullishness or attempts at Hail Marys.
Other sectors outshone when we didn’t expect they would. We expected precision farming to fare better than routing optimization (which did happen in 2024), but we underestimated it relative to power electronics (or we were overly optimistic around power electronics). Precision farming attracted $2B+ in investment across 200+ deals, and we counted nine exits, whereas power electronics investment was barely half that across ~40 deals and we counted four exits.
Investment cycles likely played a role in these outcomes. Early-stage sectors typically see high deal counts with smaller check sizes, while maturing sectors consolidate into fewer but larger deals. This pattern continues to shape the climate tech landscape.
Our misses are equally instructive. We overestimated brine recovery against both building heating and cooling and biomanufacturing and biosurfactants. Energy efficiency solutions outpaced e‑fuels, and fission slightly edged out fusion. We overestimated interest in metals recycling relative to nature-based carbon capture and PFAS remediation, but we also overestimated interest in PFAS remediation relative to offshore and onshore wind generation. Weed and pest control unexpectedly slightly edged out water purification.
The geothermal versus grid operations match-up perfectly illustrates how metric selection shapes outcomes. Geothermal led in dollars invested, but grid operations dominated in deal count and exits – a reminder that success metrics aren’t one-dimensional.
These results underscore a crucial lesson in planetary health investing: while broad sector trends and general market interest matter, the real opportunities often lie in understanding the nuanced timing of investment cycles, hype, technology readiness, market demand, and capital availability.
This exercise proved invaluable – not for testing our predictive capabilities, but for fostering substantive dialogue about climate technology’s future. I extend sincere thanks to all participants. For any of those who saved your brackets, I’d love to hear how you came out relative to actuals.
And, I invite everyone’s perspectives: How did we do? What sectors did we miss? How should we refine our evaluation metrics? For those who participated: How did your 2024 investment thesis evolve? Did your actual investments align with or diverge from our collective predictions?
And yes, we’re doing it again this year and will report back again in 2026. Looking forward to your insights and to another year of climate tech evolution.