What if we didn’t have to?

Solar, wind and other renewable energy startups have been slowly seeing more favor in venture funding, with startups in 2020 seeing $3.75 billion (per Crunchbase data). But 2022 has been a big year for renewable energy. Despite the economic slowdown, companies in the space have managed to raise around $7.6 billion.

Take . The California-based virtual power plant startup announced on Tuesday it raised $120 million led by the 2 and Development Opportunities Fund I, bringing the company’s total funding to $582 million.

The residential energy company is developing a slew of virtual power plants through 26,000 energy storage systems scattered across U.S. businesses and homes. These virtual power plants provide grid capabilities in states like California and Hawaii to reduce reliance on fossil fuel plants. In the process, Swell can optimize energy resources and distribute it in real time based on need and who is using it.

Embedded into our infrastructure

Funding in this space remained pretty static until around 2018, when the industry surpassed $2 billion for the first time. After that, funding only got bigger, peaking at $9.85 billion in 2021.

Renewable energy is becoming increasingly important for companies and homeowners in terms of reducing their carbon footprint and energy savings, and companies like Swell are taking note. For a while, renewable energy was laser-focused on large-scale energy consumption, working with public utilities and large venues. Now, startups in this space are focusing on acute use cases and distributing energy on a per-need basis.

This is important when we think about the climate and energy usage. Using energy storage solutions and sophisticated distributing technology, companies like Swell can prevent power outages — like the one that almost gripped California — from happening.

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That was back when we were all stuck at home, ordering ’s pizza, riding our s (to work off all that pizza) and binging our favorite series every night.

Things look a little different as we close out 2022. The world is entering its third COVID winter and many of the companies whose share prices surged during the pandemic have seen those stocks come tumbling back.

Take Zoom, for instance. Shares of the video conferencing platform have fallen about 90% since their pandemic peak in October 2020. just on Tuesday after the company cut its annual sales forecast and posted slowing growth numbers.

Let’s take a look at five other companies that benefited from the pandemic boom but have since come tumbling down.

: Shares of Peloton were riding high in December 2020, when they peaked around $152. But the pandemic fuel had worn off less than a year later, and shares are currently trading around $10.

: Shares of the streaming giant hit a pandemic high of around $690 in October 2021 as viewers curled up to binge watch their favorite shows. The stock is now trading at about half of that as viewers’ attention is divided with plenty of streaming options from , , and others.

: Shares of Domino’s hit their pandemic high in late December 2021 at around $564 but are now trading around $376 — down about a third.

: Shares of used-car marketplace Carvana hit an all-time high in August 2021 as used-car prices soared amid a global chip shortage that in turn prompted a shortfall of new cars. Now Carvana shares are as used-car prices fall.

: Shares of Moderna peaked in September 2021, when the COVID vaccinemaker was still benefiting from people lining up to be jabbed. Although the company has said its latest boosters against the Omicron variant than the original vaccine, not that many people are clamoring to get the latest shots. Moderna shares are trading about 60% below their pandemic high.

Illustration: Dom Guzman

This year, the industry still ranks among the largest recipients of venture capital funding. However, investment to startups in the space has been dropping every quarter this year, with Q4 likely to be the lowest yet.

For a sense of the funding trajectory, we charted out global investment over the past five calendar quarters.

Even with the steep year-over-year decline, financial services funding is still high by historical standards. Currently, 2022 is on track to deliver the second-highest funding total of the past five years. For perspective, we chart out investment and round count totals below:

Perspective from the public markets

Shifting public market sentiment looks like a major driver of change in venture appetite for fintech deals.

So far this year, virtually every venture-backed company that took advantage of the wide-open IPO window last year is down sharply from its peak. This applies to at least 20 companies, , which made debuts on U.S. exchanges, including high-profile offerings from , and .

In recent quarters, meanwhile, large fintech IPOs simply haven’t been happening. This has multifold and sometimes differing effects on venture funding. On the one hand, without IPOs, we don’t see big pre-IPO rounds. On the other hand, companies that had been contemplating public offerings might choose instead to seek more private financing.

Some of this year’s biggest rounds, in fact, were companies that generated a lot of buzz as potential IPO candidates. This includes , the buy now, pay later platform, which raised $800 million in July after cutting its valuation by 85%.

Early-stage funding is falling too

Seed and early-stage fintech and financial services investment is also down sharply. For a sense, we charted out funding and deal count for the space over the past six quarters at seed, Series A and Series B:

At early stage, some of the recent declines can be attributed to the fewer really big rounds and likely more constraint around valuations.

Last year, for instance, raised over $1.4 billion in Series B financing at a peak valuation of $25 billion, per Crunchbase data. This year, we would hope venture investors would refrain from putting that kind of cash to work in any company with clear red flags around compliance and corporate governance.

Methodology

The dataset for the funding analysis includes companies categorized by Crunchbase as one of several sectors tied to fintech and financial services. Companies included in the results may be fully financial services-focused or include financial services as a significant focus of their business models. Funding rounds included in the results totaled at least $200,000 and included companies founded no more than 20 years prior to the funding.

Illustration: Dom Guzman

Fast-forward to today: In November, announced ’ lab-grown chicken .

It’s been a long road for Upside Foods, the first company in this space to receive venture funding back in 2015, per Crunchbase data. But the reality of a bustling, highly competitive lab-grown meat startup system is not dissimilar from the horrifying visual of KFC internet lore. Scientists can grow lumps of meat in petri dishes that can mimic chicken breast, steak, ground meat and even filets of salmon with just a few stem cells.

Funding in the cultivated meat space has reached $693.5 million so far in 2022. That’s the second-largest amount of funding per year in that industry after 2021, and represents a 208% increase from funding in 2020.

Plants vs. cultivated meat

It is interesting to see that plant-based food, often a concoction of soy proteins, fermented mushroom cells and seaweed, is still netting more money than cultivated meat. But it had a five-year head start; the first plant-based meat startups to get venture funding happened in 2010, per Crunchbase data.

The sector also encompasses a wider variety of foods like milk and eggs. But plant-based meat hasn’t been immune to the slew of logistical- and supply chain-related challenges that plague the food industry, and companies like .

Everything around meat — maintaining a home for animals, feeding them, butchering them, packaging them and selling them — is simply an insufficient use of supply chain capabilities. Thirty-six percent of the world’s crop calories , and animal farms . A 2020 report from says, unequivocally, that “the meat industry is unsustainable” — especially as our population reaches 8 billion.

So perhaps it’s unsurprising that cultivated meat (a more palatable word for “lab-grown,” perhaps) is seeing investment from giant meat producers like , and . What if, instead of growing whole animals, we only grow the parts we eat?

This all sounds great, but we’re not sure how well cell-grown meat scales. We’re not even sure if, at full capacity, it will be that much cheaper or better for the environment than how meat is grown now. Cultivated meat requires lab space, disposable equipment () and logistical operations to package and ship the meat as well.

In November, Upside Foods (for comparison, 50,000 pounds of meat equals roughly 113 cows, and 53,000 square feet is 1.2 acres).

The IDTechEx report does point out a rather obvious solution that’s much cheaper than cultivated meat. “Whilst many of the problems associated with animal agriculture could be solved by large percentages of the world’s population giving up meat, this seems extremely unlikely, regardless of the environmental or ethical reasons.”

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