Cleantech’s Rough Year Ends On An Up Note

By many measures, both positive and negative, this looks like the kind of investment climate that would favor cleantech startups.

For starters, global investment in clean technologies is running high. Spending on the category, which includes renewables, grids, low-emissions power sources, and energy efficiency, is on course to hit $2.2 trillion this year, per The International Energy Agency. That’s twice what is invested in fossil fuels.

Venture capital is pretty flush as well. Global venture funding in the first three quarters of the year topped $300 billion, the highest level in years. Moreover, a record share of this funding is going to companies focused on AI, a technology whose immense power demands will require massive new energy infrastructure.

The environmental case for cleantech is also only getting more urgent. Concentrations of greenhouse gases and ocean heat content both reached record levels this year, per the World Meteorological Organization, with the past three years being the warmest on record.

All this is to say that the macro picture, a bullish one for cleantech investment, contrasts sharply with the actual numbers, which show this was an unusually weak year for the space.

Lowest funding in years

How weak? This year, investors put just over $24 billion across all stages into startups in Crunchbase’s cleantech-, electric vehicle- and sustainability-related categories. That’s by far the lowest annual total in five years.

Quarter over quarter, the picture looks sunnier. Cleantech investment actually hit a low in Q1 and has since been moving higher.

One interpretation is that U.S. investors paused on some dealmaking around Q1. With the incoming Trump administration taking a hostile stance to the Biden administration’s cleantech- and climate-friendly subsidies and policies, startups and their backers needed to recalibrate strategy for an altered political environment. Once that happened, the pace picked up some.

Some of the year’s largest rounds, meanwhile, are for companies in sectors with fairly broad support across the political spectrum. In this category is nuclear — both fusion and fission 1 — which was a particularly popular investment theme. We also saw good-sized deals around geothermal power, energy storage and electric aircraft.

Largest rounds

For a broader sense of where big-ticket investment was going, we put together a list of 12 of the largest cleantech-, EV- and sustainability-related funding rounds of 2025.

Clearly, investors were still enthused about backing jumbo-sized rounds in some cases.

Case in point: The leading funding recipient this year was Austin’s Base Power, which provides battery backup power for residential properties. The 3-year-old company landed $1.2 billion across two rounds this year, with Addition as a repeat lead backer.

The next three biggest rounds, notably, were all for startups focused on nuclear power. Among them, the standout for funding was Commonwealth Fusion, which raised $863 million in an August Series B2 round. The Devens, Massachusetts-based company also said it is moving closer to being the first in the world to commercialize fusion power.

Nuclear fission is also a popular category for venture investors of late. In this cohort, X-energy, which develops small modular nuclear reactors and nuclear fuels, was another power fundraiser. The Rockville, Maryland, company secured a $700 million Series D in late November led by Jane Street Capital. And nuclear startup TerraPower also landed a huge follow-on financing this summer, picking up $650 million, with Nvidia’s NVentures as a backer.

Battery investment, on the other hand, has been less robust. Investors braced for a heavy loss last year when Swedish EV battery maker Northvolt, one of the most heavily funded companies in the space, initially filed for bankruptcy.

Still, deals were getting done. Besides Base Power, there were three other battery-related companies on our top rounds list for 2025. These were Dutch battery storage startup Return, Woodinville, Washington-based silicon battery material producer Group14 Technologies, and battery recycling company Redwood Materials.

Perking up at year’s end

Probably the most encouraging signal for cleantech investment is it closed 2025 in a much stronger position than when it began the year. Given that drivers of demand are only strengthening, it looks reasonable to be optimistic about a continued rise.