What are the best climate tech startups?

This blog post has been written by the person who has mapped the climate tech market in a clean and beautiful presentation

Climate tech funding dropped 59% to $37.4 billion in H1 2025, but strategic investors now fill nearly half the capital stack with debt and corporate backing.

Ten breakthrough startups spanning hydrogen electrolysis, long-duration storage, and carbon removal have secured record funding and industrial pilots, positioning themselves as market leaders for the next decade.

And if you need to understand this market in 30 minutes with the latest information, you can download our quick market pitch.

Who are the leading climate tech startups globally in 2025 and what sets them apart?

Sunfire leads the green hydrogen space with €200 million in export-credit guaranteed financing, becoming the first electrolyser manufacturer to secure such backing.

Base Power dominates residential storage through its battery-as-a-service model that drops consumer entry costs below $1,000. Their $200 million Series B funding in April 2025 will fund a Texas gigafactory targeting 2026 production.

Form Energy continues advancing iron-air technology with 100-hour discharge capability, positioning them uniquely for grid-scale seasonal storage. Their West Virginia facility represents the first commercial-scale iron-air production line globally.

Climeworks operates the world's largest direct air capture facility at 36,000 tons CO2 annually, with credits pre-sold to JPMorgan, Microsoft, and Stripe. Their Mammoth plant in Iceland demonstrates commercial viability at unprecedented scale.

Stegra secured Europe's largest climate infrastructure loan at €4.2 billion, with confirmed offtake agreements from Mercedes and Volvo extending through 2030.

Which climate tech startups secured the most funding in 2024-2025?

Stegra leads with €4.5 billion total financing combining €4.2 billion debt and €300 million equity for their Swedish green steel facility.

Form Energy raised $405 million in Series D funding during 2024, the largest pure-venture round for long-duration storage technology. Commonwealth Fusion Systems secured $84 million for fusion development, while Sila Nanotechnologies closed a $590 million round for next-generation battery materials.

Base Power's $200 million Series B represents the largest residential storage funding round, backed by Andreessen Horowitz and aimed at nationwide expansion. Sunfire's €200 million guarantee line differs from traditional equity funding but provides equivalent capital access for scaling production.

Northvolt's bankruptcy filing in late 2024 after raising over $15 billion demonstrates that large funding amounts don't guarantee success without execution capabilities and market timing.

Need a clear, elegant overview of a market? Browse our structured slide decks for a quick, visual deep dive.

If you want fresh and clear data on this market, you can download our latest market pitch deck here

Which investors and VCs are most active in climate tech funding?

Breakthrough Energy Ventures remains the most active pure-play climate VC, having deployed over $2 billion across 150+ companies since inception.

Lowercarbon Capital focuses exclusively on hardware-intensive climate solutions, with portfolio companies raising over $3 billion in follow-on funding. Prelude Ventures specializes in industrial decarbonization, backing companies like AtmosZero and Carbon Clean.

Traditional VCs like Andreessen Horowitz increasingly allocate dedicated climate funds, with a16z leading Base Power's $200 million round. Bessemer Venture Partners and General Catalyst have established dedicated climate practices with $500+ million commitments each.

Investment conditions have shifted toward later-stage funding with proven technology demonstration. Series A rounds now require pilot customer validation, while Series B+ demands commercial traction and clear scaling pathways.

Debt financing has become critical, with infrastructure funds like Copenhagen Infrastructure Partners and Energy Impact Partners providing non-dilutive capital for asset-heavy climate solutions.

Which corporate backers and industry giants support these startups?

Amazon leads corporate climate investing through its $10 billion Climate Pledge Fund, backing companies like Climeworks, Redwood Materials, and CarbonCure Technologies.

Microsoft commits $1 billion annually to carbon removal through advance purchase agreements with Climeworks, Carbon Engineering, and 1PointFive. Their approach creates guaranteed revenue streams that enable startup scaling.

ENGIE Ventures actively invests in grid-scale storage and hydrogen, with portfolio companies including Form Energy and Electric Hydrogen. Total Energies has deployed over €500 million in climate tech through its venture arm.

Automotive giants drive electric mobility investments, with GM Ventures backing Sila Nanotechnologies for advanced battery materials. Mercedes and Volvo's offtake agreements with Stegra provide revenue certainty for green steel production.

Industrial corporations increasingly establish strategic partnerships rather than pure financial investments, providing market access and technical validation that proves more valuable than capital alone.

Which startups won major awards or recognition in 2024-2025?

BETA Technologies claimed the #1 spot on TIME's GreenTech 250 list for 2025, recognizing their 386-kilometer range eVTOL prototype and advanced FAA certification progress.

AtmosZero won Bloomberg New Energy Finance's Pioneers Award 2025 for their industrial heat pump technology that replaces natural gas boilers with 70%+ emissions reduction. Carbon Clean also secured top-10 recognition on TIME's GreenTech list.

The EarthX Climate Tech Prize recognized breakthrough innovations in power grid solutions, with winners including grid-forming inverter technologies and advanced energy management systems.

EU LIFE Awards highlighted circular economy and nature-based climate solutions, with several European startups gaining recognition for ecosystem restoration and waste-to-energy technologies.

The AI for Good Impact Awards recognized climate AI applications, particularly in carbon accounting, emissions monitoring, and climate risk assessment platforms.

Which climate tech startups are developing breakthrough technologies?

Sunfire's solid oxide electrolyser cells (SOEC) achieve 85%+ efficiency compared to 70% for conventional alkaline electrolysis, reducing hydrogen production costs by 20-30%.

Form Energy's iron-air batteries deliver 100-hour discharge duration at $20/kWh, compared to 4-hour lithium-ion batteries at $150+/kWh. Their technology uses abundant iron and air instead of lithium or cobalt.

AtmosZero's thermal battery system captures waste heat for later use, enabling industrial facilities to reduce natural gas consumption by 70%+ through electrification without infrastructure changes.

Commonwealth Fusion Systems advances high-temperature superconducting magnets for fusion power, with their SPARC reactor targeting net energy gain by 2026.

Wondering who's shaping this fast-moving industry? Our slides map out the top players and challengers in seconds.

If you need to-the-point data on this market, you can download our latest market pitch deck here

What technological breakthroughs are expected from leading startups in 2026?

Form Energy will begin commercial production of iron-air batteries at their West Virginia gigafactory, delivering the first grid-scale 100-hour storage systems to utility customers.

Stegra's first green steel slabs are scheduled for delivery in 2026, demonstrating commercial-scale hydrogen-based steel production with 95% emissions reduction versus conventional blast furnaces.

Base Power's Texas facility will produce residential battery systems at sub-$1,000 pricing, making home energy storage accessible to mainstream consumers for the first time.

Commonwealth Fusion Systems targets net energy gain demonstration with their SPARC reactor, potentially proving commercial fusion viability within the decade.

Climeworks plans to scale direct air capture to 1 million tons CO2 annually by 2030, with next-generation facilities achieving sub-$100/ton capture costs through technological improvements and economies of scale.

Which regions lead in climate tech startup development?

The United States attracts 51% of global climate tech funding, totaling $19 billion in H1 2025 despite the overall decline.

Europe leads by deal count with over 800 transactions but experienced a 71% funding drop to $8.2 billion as mega-rounds disappeared. Germany dominates hydrogen technology with companies like Sunfire, while Sweden leads green steel through Stegra.

California remains the global hub with 35% of US climate tech companies, followed by Massachusetts (12%) and Texas (8%). The Bay Area concentrates on software and energy management, while Texas focuses on manufacturing and industrial applications.

China's climate tech sector operates largely independently, with domestic funding exceeding $15 billion annually for solar, wind, and battery technologies. However, geopolitical tensions limit cross-border investment and technology transfer.

Israel emerges as a specialized hub for climate AI and precision agriculture, with over 200 climate tech startups receiving $800 million in 2024 funding.

Which startups have unique competitive advantages?

Base Power's battery-as-a-service model eliminates upfront costs for consumers while generating recurring revenue, creating a differentiated business model in the commodity battery market.

Form Energy's iron-air chemistry uses abundant materials (iron and air) instead of scarce lithium, cobalt, or vanadium, providing sustainable cost advantages as the market scales.

Climeworks' first-mover advantage in large-scale DAC includes pre-sold carbon credits through 2030, providing revenue certainty that competitors lack.

Stegra secured binding offtake agreements with premium automotive manufacturers, ensuring demand for green steel at price premiums over conventional steel.

AtmosZero's drop-in replacement design allows industrial customers to electrify heating without facility modifications, reducing adoption barriers compared to comprehensive retrofits.

If you want actionable data about this market, you can download our latest market pitch deck here

How much capital was raised globally in climate tech during 2024-2025?

Global climate tech funding totaled approximately $92 billion in 2024 before declining to $37.4 billion in H1 2025, representing a 59% decrease year-over-year.

However, non-dilutive financing including debt, guarantees, and strategic corporate capital now comprises nearly 50% of total funding, up from 25% in 2023. This shift reflects the capital-intensive nature of scaling climate hardware.

Venture capital specifically dropped from $28 billion in 2024 to $12 billion in H1 2025, while project finance and infrastructure funding increased from $40 billion to $18 billion over the same period.

The funding decline primarily affected early-stage companies, with seed and Series A rounds falling 65%, while Series C+ funding declined only 35% as investors focus on proven technologies.

Looking for the latest market trends? We break them down in sharp, digestible presentations you can skim or share.

What is the outlook for climate tech fundraising in 2026?

Investors expect selective growth-equity funding to dominate 2026, with infrastructure vehicles targeting proven technologies approaching commercial scale.

First-of-a-kind (FOAK) projects face the largest capital gap, requiring blended finance combining government support, corporate offtake, and patient capital to achieve bankability.

Strategic corporate investments will likely increase as companies seek technology access and supply chain security rather than pure financial returns.

The focus will shift toward revenue-generating companies with contracted cash flows, moving away from pure technology development toward commercial deployment and scaling.

Government policy support through tax credits, loan guarantees, and purchase commitments will become essential for attracting private capital to capital-intensive climate solutions.

Which startups show the strongest growth prospects over the next few years?

Form Energy positions for exponential growth as utilities require long-duration storage for renewable integration, with their iron-air technology addressing a $120 billion market by 2030.

Base Power targets the $50 billion residential energy storage market with their service model reducing consumer barriers and enabling rapid scaling without supply chain constraints.

Climeworks leverages corporate net-zero commitments driving demand for verified carbon removal, with the voluntary carbon market projected to reach $100 billion by 2030.

Stegra benefits from EU carbon border adjustments that will penalize conventional steel imports, creating protected demand for low-carbon steel within Europe.

Planning your next move in this new space? Start with a clean visual breakdown of market size, models, and momentum.

Conclusion

Sources

1. Net Zero Insights - State of Climate Tech Q3 2024
2. Luma - Climate Tech Event H1 2025
3. Net Zero Insights LinkedIn - H1 2025 State
4. Vestbee - Top European Climate Tech VCs
5. PwC - Climate Tech Investment Report
6. Climate Tech Digital - Top 10 Funds
7. Female Switch - Climate Tech VC Firms
8. TIME - World's Top GreenTech Companies 2025
9. Bloomberg NEF - 2025 Pioneers Award Winners
10. Yahoo Finance - Base Power $200M Series B
11. Review Energy - Sunfire €200M Financing
12. Bebeez - Largest Funding Rounds 2024