In 2024, the cleantech sector experienced a significant decline in fundraising, with global investment anticipated to reach its lowest point in four years, according to Crunchbase data. A reduction in the number of transactions has also been noted, indicating a challenging landscape for sustainability-related ventures.
Certain sectors have faced notable setbacks. The battery industry was particularly affected when Northvolt, a prominent startup from Sweden, filed for bankruptcy. Investments in wind and solar energy projects also slowed down. Despite these challenges, some areas continue to receive robust funding. For instance, sectors focused on carbon capture, storage, and the hydrogen industry are witnessing growth in financial backing.
Prominent financing activities highlight the landscape’s complexity. The most significant equity funding round of the year was led by Pacific Fusion, which raised $900 million in October for its innovative fusion technology aimed at providing clean energy. Other notable investments include an $800 million round for Intersect Power, a company that develops clean energy projects alongside energy-intensive facilities, and a $405 million investment for Form Energy, which is working on affordable battery solutions.
Investment activity remains strong among dedicated climate-focused funds. Lowercarbon Capital and Breakthrough Energy Ventures have been particularly active, leading multiple financing rounds this year. Additionally, firms like Chevron and Shell have participated actively through their strategic investment arms.
While equity investments have declined, the cleantech sector has seen a shift towards larger debt financings, with several exceeding $1 billion. This shift may indicate a maturation of the startup landscape as infrastructure-focused companies increasingly depend on debt to scale their operations.
Looking towards 2025, investors are cautious yet optimistic, particularly regarding forthcoming policy changes, notably in the United States. Experts express uncertainty about potential shifts under the new administration but anticipate continued opportunities in energy efficiency and grid modernization. There is growing interest in nuclear technologies, especially fusion energy, as bipartisan support may bolster development efforts.
Overall, despite the challenges faced in 2024, there’s hope for recovery and growth in the cleantech sector, particularly as investor support strengthens in the latter half of the year.