State of Climate Tech H1 2025 Report
The State of Climate Tech H1 2025 explores the key trends, challenges, and opportunities in this rapidly evolving ecosystem. It offers comprehensive insights into the forces shaping the future of Climate Tech, providing investors, corporations, and key financial decision-makers with the critical insights needed to capitalize on emerging opportunities and drive the adoption of impactful solutions.
What’s Inside
Introduction
A word from the founders
A word from our sponsor
Key takeaways
What's shaping Climate Tech in 2025
Climate Tech funding holds steady. Signs of a new normal?
Emerging tech contributes to the surge in non-dilutive funding
Equity is reshaping from mature to emerging sectors
United States widens the lead on the global stage
How is AI unlocking Climate innovation?
Nearly 1 in 5 climate dollars goes to AI-enabled solutions
Funding of AI-driven climate solutions concentrated in the U.S.
AI drives innovation across Climate Tech sectors
How are strategics impacting Climate Tech?
Strategic investors show greater resilience amid dealmaking slump
Strategics key in driving next-gen climate solutions
M&A target key industrial decarbonization solutions
Research Approach
Report scope and definitions
Research methodology
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Media Coverage
Key Highlights
US unexpectedly widens its lead while equity funding in Europe continues to decline
To the surprise of many, the US maintained its leadership position, accounting for $10.2 billion in equity investment, nearly half of all global equity funding. Even with the Inflation Reduction Act (IRA) cuts significantly impacting government grants, and the administration’s stance against the industry, equity and debt activity held firm, signalling that market demand could make up policy headwinds.
Strategics play an increasingly important role in advancing critical Climate Tech solutions
While equity investment declined across most sectors, strategic investors participated in 6 out of 10 deals involving high-impact emerging technologies in H1 2025. This commitment is also evident in the growing number of commercial partnerships and sustained M&A activity, signaling promising conditions for continued market growth and investor interest in Climate Tech.
AI has entered Climate Tech
Corporations remain a key driver of Climate Tech momentum, fueled by intensified M&A activity. Among Fortune Global 500 companies, Oil & Gas firms are leading the way—driving 1 out of 4 M&A transactions in the sector.
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