Cleantech Investment Faces Steep Decline in 2025

Investment in cleantech and sustainability startups is projected to fall sharply in 2025, continuing a downward trend from 2024. According to an analysis by Crunchbase, only $8.7 billion has been invested in the sector so far this year, a 46% drop compared to the same period last year, which was already a weak year for funding.

Early-stage deals have been hit particularly hard, with just $3.2 billion going to Series A and B rounds—half the amount seen in early 2024. This slowdown raises concerns about the pipeline for future unicorns and IPO candidates, especially as the U.S. Department of Energy scales back grants for clean energy and carbon capture projects.

Despite the downturn, a few startups have managed to secure significant funding. Base Power, a Texas-based residential energy storage provider, landed the largest early-stage round—a $200 million Series B. Other notable deals include Electra ($186 million Series B for clean iron production) and Chestnut Carbon ($160 million Series B for reforestation projects).

Later-stage companies have also seen some major investments, though the number of $100M+ rounds has fallen by more than a third. Standouts include Silicon Ranch, a solar and battery project operator, which raised $500M from AIP Management and Helion Energy, a fusion startup, securing a $425M Series F from a group of investors.

Despite the funding slump, rising global energy demand, driven in part by AI expansion, could reignite investor interest. Additionally, worsening climate extremes may accelerate the need for innovative cleantech solutions. While today’s startups won’t solve the climate crisis alone, successful technologies could pave the way for renewed investment in the years ahead.

For now, however, the sector faces a cautious and selective funding environment.

Source: crunchbase.com