Climate tech investment surges back in 2025
Investment in climate tech is back on the rise — and this time it’s coming in hot.
After two consecutive years of decline, the global climate venture and growth market climbed 8% in 2025, reaching an impressive $40.5 billion, according to data from Sightline Climate. That number alone would be worth celebrating, but what makes this moment even more remarkable is the quality and direction of the investments — this isn’t money being thrown around aimlessly. It’s capital being allocated more strategically than ever, focused on technologies that genuinely have the potential to scale and deliver real impact on the planet.
And it doesn’t stop there. It was also a record year for climate funds: 179 funds collectively raised $92 billion in new capital. For anyone who’s been following this space for a while, that number signals a deep shift in institutional investor mindset. They’re looking at climate not as a corporate social responsibility checkbox anymore, but as one of the biggest economic opportunities of the century. When money moves at that scale, the entire ecosystem accelerates with it.
A significant part of this capital unlock happened in the United States, where the passage of the so-called One Big Beautiful Bill Act by the federal government helped clarify which policies would be preserved and incentivized. That political definition acted as a kind of green light for funds that had been in wait-and-see mode, watching the landscape before committing resources. With the rules of the game clearer, investors started acting with more confidence, and that directly fueled the record-breaking fundraising numbers we saw throughout the year.
But what truly changed the game was artificial intelligence. Nearly 28 cents of every dollar invested in climate equity went straight to AI-enabled solutions — with data centers alone pulling in nearly $2 billion of that total. This isn’t a coincidence. It’s a paradigm shift for the sector 🔄, where optimization algorithms, predictive models, and automation systems are no longer differentiators — they’re table stakes for any startup that wants to compete in this space.
Another trend that gained serious momentum was the race to secure domestic materials and critical minerals. Copper and lithium, for example, face projected shortfalls of 30 to 40% by 2035, and that scarcity has moved beyond being just a climate concern to become a matter of national security. Countries and companies are scrambling to diversify their supply sources and reduce dependence on supply chains concentrated in a handful of regions around the world.
Meanwhile, climate adaptation finally entered true asset class territory, with funding for the category jumping 64%. Investors and buyers are recognizing that a hotter planet represents a concrete operational risk — and that tools to manage that risk are products with real and growing demand.
Three major fronts are dominating this new wave of innovation:
- Data centers — focused on energy efficiency and cleaner infrastructure
- Materials innovation — critical minerals, industrial waste, and new solutions for batteries and inputs
- Climate adaptation — sensors, disaster response platforms, and real resilience for businesses and farmers
To map out the most promising players in this landscape, the site Trellis selected 15 early-stage startups spread across these three categories. A team of analysts evaluated 105 candidates based on four criteria — solution innovation, commercial traction, impact potential, and team strength — to arrive at five finalists per category. Let’s meet each of them. 👇
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Data centers: the push for smarter, more sustainable infrastructure
The explosive growth of artificial intelligence brought with it a problem that few anticipated at the speed it arrived: data center energy consumption is hitting historic highs, and the pressure for more efficient and sustainable solutions has never been greater. It’s in this context that a group of climate tech startups is building the next generation of computational infrastructure — smarter, more efficient, and with a carbon footprint far smaller than traditional models.
WAVR Technologies is probably the most eye-catching of the bunch. The company developed a system that generates water directly from the atmosphere using waste heat from AI data centers. Instead of letting that thermal energy go to waste, WAVR redirects it into an air moisture capture process, producing clean water as a byproduct. It’s the kind of solution that solves two problems at once — heat waste and the growing demand for cooling water — and it’s already turned plenty of heads within the ecosystem. CEO Rich Sloan leads the operation.
Airloom Energy takes a different approach to delivering clean energy to data centers: modular wind systems. Unlike traditional wind turbines, which are massive and expensive structures, Airloom’s technology uses a more compact and scalable format that can be deployed directly near data centers, utilities, and even defense installations. CEO Neal Rickner is at the helm of this project.
etalytics tackles the problem from another angle: AI-powered software designed to optimize data center cooling. The system identifies energy waste in the cooling process and reduces manual operations, something that directly impacts the operational costs of these facilities. Considering that cooling has historically accounted for a huge chunk of a data center’s energy bill, the potential savings are significant. Niklas Panten, co-founder and CEO, is leading the charge.
Rounding out the category, we have Aikido Technologies, which is building floating offshore data centers. The idea of taking servers off dry land and putting them in the ocean might sound radical, but it makes sense when you consider that the ocean offers abundant natural cooling and can drastically reduce the need for artificial refrigeration systems. CEO Sam Kanner heads the project.
Finally, Magnefy uses AI combined with magnetic sensing to detect electrical faults in transformers and inverters — essential components of the infrastructure that powers data centers and renewable energy grids. Identifying problems before they cause catastrophic failures can save millions in repairs and downtime. Joseph Kao, co-founder and CEO, leads the team. 🚀
New materials for a world in transition
The energy transition needs materials. Lots of materials. Lithium, cobalt, nickel, copper, rare earths — the list of critical minerals that power batteries, solar panels, and wind turbines is long, and the current supply chain is far from sufficient to support the growth pace the market demands. With projected shortfalls of 30 to 40% for copper and lithium by 2035, this has become as much a national security issue as it is a climate one.
This is where a new generation of startups is attacking the problem from different angles: some are seeking alternatives to scarce minerals, others are trying to extract them from unconventional sources like industrial waste, and still others are reinventing the manufacturing processes themselves to make them cleaner and more efficient.
Aepnus Technology is one of the standouts. The company developed a method for converting industrial waste into useful chemicals for sectors like mining, batteries, textiles, and paper. Instead of relying on conventional chemical pathways that are expensive and polluting, Aepnus uses electrochemical processes that dramatically reduce both the cost and environmental impact of production. CEO and co-founder Lukas Hackl is at the helm.
REEgen follows a similar logic, but with a biological approach: the company uses engineered microbes to recover critical minerals from industrial waste. By using biology as a mining tool, REEgen can access concentrations of valuable materials that would be economically unviable to extract through traditional methods. Alexa Schmitz, co-founder and CEO, leads the operation.
Elementium Materials is focused on improving battery performance with drop-in replacement electrolytes that can be integrated into existing manufacturing processes. The idea is to boost performance without requiring radical changes to production lines already in place — which makes large-scale adoption much easier. CTO Gustavo Hobold presents the technology.
Smart Plastic Technologies tackles another massive problem: plastic. The company created additives that maintain the mechanical performance of plastic during its useful life but allow bioassimilation at the end of its use cycle. Basically, the plastic works normally as long as it needs to, and then gets absorbed by the environment instead of accumulating as waste for hundreds of years. CSO Sumathi Pakki leads the science behind the solution. ♻️
Climate adaptation: resilience as a product
If the previous two categories focus on reducing emissions and transforming the industrial base of the economy, climate adaptation starts from a different and equally urgent premise: the climate has already changed, extreme events are already happening more frequently and intensely, and businesses, governments, and communities need tools to survive and adapt to this new reality.
This segment used to be treated as a sideshow in the climate conversation, but it’s gaining increasing attention from investors — funding for adaptation rose 64% — precisely because the demand is immediate, measurable, and doesn’t depend on behavior changes at a global scale. It responds to a market that already feels the problem firsthand every year.
Beehive is one of the most popular startups on this list. It’s an AI platform that helps companies prepare for and respond to natural disasters, while also automating climate risk reporting. In a scenario where insurers are abandoning entire markets because they can’t adequately price risks, having a tool that organizes data and delivers actionable intelligence is worth its weight in gold. CEO Adriel Lubarsky leads the project.
Nucleic Sensing Systems operates on an equally critical front: the company deploys autonomous biosensors that monitor water and harmful biological signals in real time. This has applications ranging from early detection of contamination in water reservoirs to monitoring biological risks in urban and rural areas.
EnKoat tackles the problem from a more tangible angle: advanced thermal barrier coatings that extend the lifespan of commercial roofs and reduce building energy demand. In a world where heat waves are getting longer and more severe, cutting the need for air conditioning isn’t just a financial savings — it’s a habitability issue. Co-founder and CEO Matthew Aguayo leads the company.
Helix Earth works in a complementary way, removing moisture before it enters the cooling process, which cuts air conditioning energy consumption and improves indoor air quality. Co-founder and CEO Rawand Rasheed presents the technology.
In the agriculture space, Sensegrass provides soil intelligence sensors and AI-powered agronomy tools to help farmers optimize their crops and build climate resilience. In a scenario where an unexpected drought in a producing region can move global commodity prices in a matter of days, having that kind of early intelligence is incredibly valuable. CEO Lalit Gautam is at the helm.
And wrapping up the list, California Cultured brings a pretty bold proposition: producing coffee and chocolate at industrial scale through plant cell biomanufacturing. Considering that both crops are extremely vulnerable to climate change — and that global demand only keeps growing — creating an alternative that doesn’t depend on specific weather conditions could be a game changer for food security. CEO Alan Perlstein leads the project. 🌾
What these 15 startups have in common
Looking across the 15 companies mapped in this roundup, it’s clear there’s no single formula for building a successful climate tech startup — but there is a set of characteristics that consistently shows up among the ones moving fastest.
The first is the combination of deep science with a pragmatic go-to-market strategy: all of these companies have cutting-edge technology at the core of their business, but none of them are waiting for perfection before going to market. They build, test, iterate, and learn from real customers, which accelerates the development cycle and increases the chances of finding the right fit before running out of capital.
The second standout trait is the strategic use of artificial intelligence not as a marketing buzzword, but as a real lever for competitive advantage. Whether it’s accelerating the discovery of new materials, optimizing energy consumption in real time, or modeling climate risks with surgical precision, AI sits at the center of these companies’ value propositions in a way that would be impossible to replicate without it. This creates meaningful barriers to entry and explains why investors are willing to put capital into them at such early stages — the scale potential is genuinely enormous when the technology delivers as promised.
Finally, the timing of these companies is another element that can’t be ignored. The convergence of climate urgency, artificial intelligence maturity, and availability of innovation capital has created a window of opportunity that rarely appears like this in the history of technology. The startups positioned at this intersection right now — with a working product, an experienced team, and a tested business model — have a timing advantage that’s worth as much as any patent or proprietary technology.
The pitch competitions organized by Trellis, held on consecutive weeks throughout May and June 2026, offer a chance to see these founders presenting their solutions live and fielding questions from investors. The data centers category was presented on May 20, materials on May 27, and climate adaptation on June 3.
The climate tech ecosystem is buzzing, and keeping a close eye on who’s emerging in it is watching the future of the global economy being built in real time. 🌍
