Overall, 2024 was a relatively weak 12 months for clean technology equity financing.
Global investments in sustainability categories 1 in keeping with Crunchbase, it looks like it would hit a four-year low data. The variety of transactions has also declined, as seen in the chart below.
However, while the numbers for top corporations are lower, the picture across sectors is more mixed.
There has been a marked decline in several areas. The most visible is the battery sector, which has deteriorated further in comparison with last month filing for bankruptcy through Sweden Northvoltone of the best-funded players. Financing for wind and solar energy has also decreased.
The remaining spaces are flourishing. For example, we proceed to see strong funding for carbon capture, storage and reuse activities. Financing for start-ups in the hydrogen industry continues to grow dynamically.
The largest capital rounds in 2024
The mega rounds are also still going on. Even as overall funding has declined, many cleantech corporations have managed to secure very large investments.
To illustrate this, we used Crunchbase data shortlisting awards in sectors including fusion, carbon capture, energy storage and electric vehicles.
The largest financing went to a company based in Fremont, California Pacific Fusionwhich raised $900 million in Series A in October, led by: Generic catalytic converter. The year-old startup says its technology could help pave the method to “unlimited, clean energy available on demand” through a process called pulsed inertial magnetic fusion.
More huge funds arrived just this month Power intersectiondeveloper of unpolluted energy projects positioned in energy-intensive facilities resembling data centers and industrial facilities. The company has raised over $800 in funding led by TPG Rise Climate Fund AND Google.
Meanwhile in the energy warehouse Energy Form secured a $405 million Series F in October, led by: T. Rowe Price. A Massachusetts startup is working on low-cost battery systems for electric grids powered by renewable energy.
In addition to those three major fundraisers, we also saw major funding for a carbon transformation company Twelvemanufacturer of battery materials Theyand electric vehicle charging service provider Elektra.
Climate funds and strategic investors dominate
The most lively Cleantech investors also remained quite lively.
While many general enterprise and development firms are investing in cleantech startups, industry observers note that more deals are being made by climate-focused funds and strategic investors. This was the case in 2024, when well-known names in clean technologies filled the ranks of the most lively and highest-spending investors in the space industry.
They are leading in terms of the variety of transactions Low-emission capital AND Groundbreaking energy projectseach of which has invested in at least 34 known funding sources this 12 months, in keeping with Crunchbase data.
Lowercarbon, a sustainability-focused fund co-founded by Early Twitter AND Uber investor Chris Saccahe was also a frequent lead investor. This includes one of the latest rounds, co-leading this month’s $150 million Series B investment in a direct air capture company Heirloom.
Breakthrough Energy Ventures also had a strong 12 months, supporting huge rounds for Pacific Fusion and Form Energy, in addition to a variety of seed and early-stage deals. Meanwhile, fellow heavyweight TPG Rise has only fought seven rounds this 12 months, but they have included some of the biggest ones, resembling those at Intersect and Twelve.
Among the strategies, Chevron he was busy in 2024, supporting eight deals, including enterprise capital corporations Chevron technology ventures AND Chevron New Energies. Compete Shell and him Shell’s ventures the arm participated in seven investments.
Debt transactions
While equity investment in clean tech has declined, this has been offset by heavy debt financing for space corporations.
According to Crunchbase datain 2024, there have been at least five debt financings price at least $1 billion. The deals listed below have collectively raised greater than $14 billion, representing nearly half of total cleantech equity financing this 12 months.
As cleantech corporations scale their operations, they often turn to debt financing. As such, the shift from equity rounds to project financing may indicate a maturing startup pipeline.
We look to the future with optimism and fear at the same time
Looking ahead to 2025, cleantech investors are preparing for policy changes that might impact their portfolios and financing decisions. This is most noticeable in the US with a second Donald Trump the administration is coming.
For now, though, we’re still in wait-and-see mode when it involves actual policy details.
“I don’t think anything has been explained,” said Dan Connell, managing director of real assets and sustainability at the firm CF Private Fundregarding potential changes affecting electric vehicles, grid modernization and other areas of interest to cleantech investors.
Connell said he still sees hope for growth-stage investments in energy efficiency and grid capability optimization as energy demand grows. He also mentioned sensor-based modernizations of water supply and irrigation systems as an area ready for investment.
Startup activity related to fusion energy and other nuclear technologies can also increase, said Andrew Sparks, co-chair of the firm’s climate technologies practice Goodwin. He described it as an area where there is “some convergence of political support” from each the left and right.
In the broader cleantech space, from a purely numbers-based perspective, the direction seems positive. In particular, we saw that investor support for large rounds was much stronger in the second half of this 12 months than in the first. The three largest rounds of the 12 months – Pacific Fusion, Intersect Power and Form Energy – closed in the fourth quarter.
Of course, this does not tell us what is going to occur in 2025, but at least the dynamics seem favorable.