Cleantech On Track For Weak Funding Year

Investment in startups tied to clean energy and sustainability is on track for a sharp annual decline in 2025, driven by a drop-off in large rounds and a steep contraction in early-stage dealmaking.

So far this year, $8.7 billion has gone to companies in Crunchbase sustainability-related categories. That’s a decline of 46% from the same period in 2024, which was also the weakest year for funding in some time, as charted below.

Early-stage drop-off

Early-stage investment is off to a particularly weak start this year, with around $3.2 billion going to Series A and Series B deals, per Crunchbase data. That’s roughly half of year-ago levels.

Declines at this stage are a concerning indicator for future funding, since today’s early-stage companies go on to be tomorrow’s unicorns and IPO candidates. Moreover, in the U.S., funding reductions coincide with the Department of Energy canceling billions in project grants for clean energy and carbon capture efforts.

Even against this challenging backdrop, however, we did see some large early-stage rounds announced this year. The largest was a $200 million Series B for Base Power, an Austin, Texas-based company providing residential energy storage and service with an eye to more effectively harnessing renewable power sources.

Two others — Electra and Chestnut Carbon — secured Series B rounds of $186 million and $160 million, respectively. Boulder-based Electra produces clean iron, while Chestnut Carbon develops forests on marginal crop and pasture lands.

Fewer big rounds, but still some

While investors have written some big checks to cleantech startups this year, the overall trend is one of increasing frugality.

So far, we’ve seen 17 rounds of $100 million or more to cleantech and sustainability categories in 2025. That’s more than a third fewer than we saw in the same period last year.

But despite this pullback, we did see some jumbo-sized rounds this year, particularly at later stage. The largest include:

• Silicon Ranch, an operator of solar and battery projects, raised $500 million from European infrastructure investor AIP Management. Founded in 2011, the Nashville,Tennessee-based energy company has raised more than $2 billion, according to Crunchbase data.
• Helion Energy, a fusion startup, locked up a $425 million January Series F from Lightspeed Venture Partners, SoftBank Vision Fund 2, Sam Altman and others. The round valued the Everett, Washington-based company at $5.4 billion.
• Mainspring Energy, a developer of linear generators that can integrate with onsite solar and energy storage, secured a $258 million in a Series F led by General Catalyst. Founded in 2010, the Menlo Park, California, company has raised $813 million to date, per Crunchbase.

The bull case: energy demand still on the rise

Going forward, perhaps the most bullish indicator for cleantech — and clean energy in particular — is that power demand is only heading higher. Add in the rise of energy-intensive AI, and it’s easy to imagine a customer for every kilowatt producers can add to the grid.

Moreover, climate change and the heat waves and extreme weather that accompany it are only growing more intense. And while a few funded startups won’t singlehandedly save the planet, they can at least offer technologies that can take us a few steps in a better direction. If they manage that, then it’s also reasonable to expect that eventually stepped-up funding will also follow.

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Illustration: Dom Guzman