Climate tech startups are back on investors’ radars in a big way — and the numbers make a pretty convincing case.
In 2025, global venture and growth capital investment in the sector rose 8%, reaching an impressive $40.5 billion after two straight years of decline. That figure alone would be enough to turn heads. But what makes this moment even more significant is the context behind it: a rare convergence of climate urgency, accelerating technological breakthroughs, and a strategic repositioning of global capital toward solutions that were previously seen as niche.
And it didn’t stop there. It was also a record year for climate-dedicated fund closings: 179 funds raised $92 billion in new capital, according to data from Sightline Climate. That represents a major turning point for the entire ecosystem, because when institutional money commits at that level, it creates a solid foundation for startups to grow with more predictability, less dependence on emergency funding rounds, and more room to execute long-term strategies.
Part of this movement has a pretty clear catalyst: the political landscape in the United States. With the passage of the One Big Beautiful Bill Act and the definition of federal government policies, a lot of capital that had been sitting on the sidelines waiting for market signals finally started moving. Regulatory clarity, even when imperfect, acts as a trigger for investors who need some kind of anchor to make decisions in sectors perceived as high risk — like climate.
So what’s driving this new cycle? Basically three main forces are shaping where the money goes and why:
- Artificial intelligence, which now absorbs nearly 28 cents of every dollar invested in climate solutions — with data centers alone attracting close to $2 billion
- The race for critical minerals like copper and lithium, which could face shortages of 30 to 40% by 2035, making this as much a national security issue as a climate one
- Climate adaptation becoming a real asset class, with 64% growth in funding — because investors and companies have realized that a hotter planet is an actual operational risk 🌍
That’s the backdrop for this list. A team of analysts at Trellis evaluated 105 candidates based on four criteria: solution innovation, commercial traction, potential impact, and team strength. The result is 15 early-stage startups organized into three categories — data centers, materials innovation, and climate adaptation — that are well worth keeping an eye on throughout 2026. 🚀
Data Centers: When AI Becomes Part of the Problem and the Solution
Few trends in the climate tech world are as paradoxical as the growth of data centers. On one hand, artificial intelligence is being used to optimize energy grids, predict extreme weather events, and accelerate the discovery of new sustainable materials. On the other, the infrastructure powering that AI consumes staggering amounts of electricity and water. Data centers are estimated to account for roughly 1 to 2% of global electricity consumption, and that number is set to grow rapidly in the coming years. That’s exactly where real opportunities emerge for startups that can solve this paradox with technology.
The five finalists selected by Trellis in this category show just how diverse the possible approaches are for tackling this challenge. WAVR Technologies, for example, stands out with an ingenious approach: it generates water from the atmosphere using waste heat from AI data centers. Instead of simply discarding that thermal energy, the startup transforms it into a water resource — something increasingly valuable in regions where water scarcity is already a reality.
Airloom Energy is deploying modular wind systems designed for data centers, utilities, and even defense operations. The modular concept is especially relevant here because it allows renewable energy generation to be tailored to the specific scale of each facility, without relying on massive traditional wind farms that take years to get approved and built.
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etalytics attacks the problem from a different but equally promising angle: its AI-based software reduces energy waste in data center cooling and cuts down on the need for manual operations. Considering that cooling systems can account for 30 to 40% of a data center’s total energy consumption, any percentage gain on this front translates into significant savings.
Aikido Technologies proposes something more radical: building floating offshore data centers. The idea is to leverage the ocean’s natural cooling capacity and position computing infrastructure in locations with less environmental impact on onshore communities. It might sound futuristic, but the concept is already in active development.
Rounding out the data center group, Magnefy uses AI and magnetic sensing to detect electrical faults in transformers and inverters. It’s the kind of solution that’s less flashy but extremely practical — preventing failures in critical equipment avoids unplanned downtime that costs millions and wastes energy.
The best-positioned companies in this segment are working on fronts ranging from high-efficiency cooling to repurposing heat generated by servers, real-time energy optimization with machine learning algorithms, and even completely rethinking the physical architecture of data centers to maximize thermal efficiency. Some of these solutions are already at an advanced commercial stage, with contracts signed with major digital infrastructure players, which significantly reduces the perceived risk for new investors looking to enter the sector.
Fund interest in this segment is no accident. With demand for cloud computing and large-scale language model processing growing at an almost exponential rate, any solution that can reduce energy cost per unit of processing has enormous scaling potential.
Materials Innovation: The Next Frontier of Sustainability
Materials innovation may not have the immediate visibility appeal of solar energy or electric cars, but it’s one of the fields with the greatest transformative potential within the sustainability ecosystem. Nearly everything we consume, build, or throw away involves some type of material — and the current supply chain still relies heavily on highly polluting, energy-intensive processes with little to no possibility of circularity. Startups that can address this problem with advanced materials science, synthetic biology, or innovative manufacturing processes are building competitive advantages that are really hard to replicate.
In this category, the five Trellis finalists reveal approaches spanning from industrial chemistry to biotechnology.
Aepnus Technology developed a method for converting industrial waste into useful chemicals for the mining, battery, textile, and paper industries. This kind of solution is doubly relevant because it solves a disposal problem while simultaneously generating valuable inputs for industries that currently depend on virgin raw materials and high-footprint processes.
Elementium Materials is working on developing drop-in electrolytes — meaning they can be integrated directly into existing manufacturing processes — to improve battery performance. At a time when the battery supply chain is under constant pressure to deliver more range, faster charging, and less degradation, any innovation at this fundamental layer of the technology has a cascading impact across the entire electric mobility and energy storage industry.
Smart Plastic Technologies created additives for plastics that maintain material performance during use and enable bioassimilation at end of life. Rather than reinventing plastic from scratch, the startup offers a pragmatic solution that can be adopted by industry without major disruptions to existing production processes.
REEgen uses engineered microbes to recover critical minerals from industrial waste streams. It’s a biomining approach that’s gaining special relevance given the projected shortages of materials like copper and lithium. Recovering these minerals from waste streams that are currently just discarded is simultaneously an environmental solution and a response to supply security concerns for strategic inputs.
EnKoat occupies an interesting space between materials and energy efficiency. The startup develops advanced thermal barrier coatings that extend the lifespan of commercial roofs and reduce building energy demand. It’s a solution that delivers direct financial returns to property owners while also contributing to reducing energy consumption at an urban scale.
The race for critical minerals is adding even more urgency to this segment. With lithium and copper potentially facing shortages of 30 to 40% by 2035, any company that can develop functional alternatives to these materials — or enable their recycling and reuse at scale — takes on strategic value that goes well beyond conventional financial returns. Governments and large corporations are willing to pay a significant premium for supply security of critical inputs, and that creates a highly favorable commercial environment for the most innovative startups in this space.
Another interesting aspect is how artificial intelligence is accelerating the discovery process for new materials itself. What used to take decades of lab research can now be simulated and tested in much shorter timeframes, thanks to generative models and computational chemistry tools. This is compressing development cycles and allowing startups to reach the market with products faster, validated more rigorously, and with solid intellectual property — an incredibly valuable asset for investment rounds at more advanced stages.
Climate Adaptation: The Market the World Could No Longer Ignore
For a long time, talking about climate adaptation in a business context sounded almost like defeatism — as if accepting the need to adapt meant admitting failure in the mission to mitigate climate change. That stigma faded gradually, but 2025 is when the shift became most obvious: climate adaptation funding grew 64%, establishing the segment as a legitimate asset class within the climate tech universe. The market simply can’t ignore anymore that extreme weather events are a present operational reality, not some distant future threat.
The five startups selected in this category show the breadth of solutions needed to address impacts that are already happening.
Beehive developed an AI platform that helps companies prepare for and respond to natural disasters, while also automating climate risk reporting. In a landscape where regulators and investors are demanding increasing transparency about physical risk exposure, having a tool that centralizes monitoring, response, and compliance on a single platform is a massive operational advantage.
Helix Earth tackles a very practical problem: it removes humidity before it enters the cooling process of air conditioning systems, reducing energy consumption and improving air quality. With heat waves becoming more frequent and intense globally, solutions that make cooling more efficient are increasingly sought after in both commercial and residential markets.
California Cultured works on a front that connects climate adaptation to food security. The startup produces coffee and chocolate at industrial scale through biomanufacturing from plant cells. Considering that both crops are among the most threatened by climate change — with projections of significant loss of cultivable area in the coming decades — creating a production pathway independent of field conditions is a strategic bet with enormous potential impact.
Nucleic Sensing Systems deploys autonomous biosensors that monitor water quality and detect harmful biological signals. Continuous, real-time monitoring of water bodies is a key piece of adaptation infrastructure, especially in regions where flooding, agricultural runoff contamination, and toxic algae blooms pose growing threats.
Sensegrass offers soil intelligence sensors and AI-based agronomy tools to help farmers optimize yields and build climate resilience. Agriculture is simultaneously one of the activities most vulnerable to climate change and one of the most emissions-intensive, which makes solutions like this particularly relevant for balancing productivity and sustainability.
The growth of this segment also reflects an important shift in how investors and executives view the topic. Climate risk is financial risk, and that equation became much clearer after several years of billions in losses caused by droughts, floods, heat waves, and large-scale wildfires. Companies that once treated this as cosmetic ESG window dressing are now purchasing concrete solutions from startups specializing in adaptation, which creates a virtuous cycle of commercial validation, traction, and attraction of new investment to the sector. 💡
What These 15 Startups Mean for the Climate Tech Ecosystem
Based on criteria of innovation, commercial traction, potential impact, and founding team quality, the Trellis team arrived at a list that covers all three fronts discussed above nicely. This isn’t a ranking — it’s a group of companies that, each in their own way, are addressing real problems with approaches that go beyond the obvious. What stands out when looking at the group as a whole is precisely the diversity of paths: some are betting on deep science, others on data platforms, and others still on innovative business models that connect supply and demand in ways the climate market has never seen before.
Another point worth highlighting is the role of pitch competitions organized by Trellis. The five finalists in each category participated in virtual sessions on consecutive dates — data centers on May 20, materials on May 27, and climate adaptation on June 3 — where they presented their startups and fielded questions from investors. This kind of exposure format is valuable because it puts companies directly in front of people with capital to invest, shortening the cycle between discovery and fundraising.
What these companies have in common is timing. They’re all at an inflection point where the combination of technology mature enough to scale, a receptive market, and available capital creates rare conditions for accelerated growth. Startups that reach this point with the right product, the right team, and the right commercial partners tend to define entire categories — and that’s exactly what makes this list relevant for anyone following the climate tech and sustainability ecosystem closely.
Keeping tabs on these companies throughout 2026 is going to be, at the very least, highly instructive. Some will confirm the potential that analysts see today. Others will surprise even more. And some, inevitably, will face the natural obstacles that come with trying to disrupt established markets with new technology. But that’s exactly the dynamic that makes the climate tech startup ecosystem one of the most vibrant and relevant in the world right now. 🌱
