Cleantech Funding Faces Steep Decline in 2025
Fewer large investments and a sharp drop in early-stage deals put cleantech startups on track for a weak funding year.
Cleantech Investment Drops Sharply in 2025
Funding for cleantech startups is falling fast in 2025. So far, companies focused on clean energy and sustainability have raised $8.7 billion — a 46% drop from the same period in 2024. That year was already considered one of the weakest for the sector.
Early-Stage Deals Take a Big Hit
The most dramatic drop is happening in early-stage investments. Only $3.2 billion has gone into Series A and B rounds — nearly half of what was raised at this stage last year.
This is concerning. Early-stage companies are the pipeline for future innovation, unicorns, and IPOs. In the U.S., this slowdown comes as the Department of Energy pulls back billions in clean energy and carbon capture grants.
Still, a few standout early-stage deals have happened in 2025:
- Base Power raised $200 million in Series B. Based in Austin, Texas, the company offers residential energy storage solutions that better use renewable power.
- Electra, a Colorado-based producer of clean iron, secured $186 million in Series B funding.
- Chestnut Carbon raised $160 million to support its work restoring forests on underused farmland.
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Fewer Large Rounds, But Some Notable Deals
While investors are still writing some big checks, they’re doing it less often. Only 17 cleantech deals worth $100 million or more have been completed so far this year — more than one-third fewer than during the same period in 2024.
Still, a few major rounds stand out:
- Silicon Ranch, a solar and battery project developer based in Nashville, Tennessee, secured $500 million from European investor AIP Management.
- Helion Energy, a Washington-based fusion company, raised $425 million in a Series F backed by Lightspeed, SoftBank Vision Fund 2, and Sam Altman.
- Mainspring Energy, which makes linear generators for onsite solar and energy storage, raised $258 million in a Series F led by General Catalyst.
Why Cleantech Still Has a Future
Despite the slowdown, there are reasons to stay optimistic about cleantech. Energy demand is rising — driven by population growth and energy-hungry technologies. AI, in particular, is pushing electricity use even higher.
Meanwhile, climate change continues to worsen. Heatwaves and extreme weather underline the urgent need for cleaner, more reliable energy sources. While startup funding alone won’t solve these issues, innovative companies can offer part of the solution — and may attract renewed investment as the need becomes more urgent.