The energy sector is responsible for over 73% of global greenhouse (GHG) emissions. Its transformation is central to achieving a sustainable future, with Climate Tech solutions playing a pivotal role in making it happen.
Advancements in energy technologies, business models, and services are powering the shift. We urgently need to reduce our reliance on fossil fuels, while still meeting rising energy demands. This has accelerated investment in the energy transition, with clean energy solutions attracting the majority of Climate Tech funding. It’s estimated that annual clean energy investments need to triple by 2030 to achieve our Net Zero targets.
Innovation is happening across the entire value chain, reshaping how energy is generated, stored, and managed. This article outlines the key investment trends and the role of Climate Tech in driving the renewable energy transition.
Investment trends in the global energy transition
Our Climate Tech market intelligence platform monitors over 24,000 innovative energy companies, which have closed over 30,000 deals, with backing from 12,000 investors.
Since the Climate Tech boom of 2020, Energy has remained one of the top-funded verticals, growing its total share of investment from 23.5% in 2020 to 36.9% in 2024.
Solutions Across The Energy Value Chain
Transitioning to a sustainable energy system requires a holistic approach to addressing challenges across the entire value chain. The Climate Tech Taxonomy provides a structured framework for mapping solutions across generation, grid, storage, and efficiency/management.
Energy Generation 101
Energy generation involves converting primary energy sources into electricity to power industries, homes, and infrastructure. As of 2023, fossil fuels—primarily coal and natural gas—remain the dominant sources of energy. They account for approximately 58.5% of global electricity production.
Renewable energy sources are expanding rapidly. Solar and wind energy together supplied 13% of global electricity in 2023, up from just 3% a decade earlier. Hydropower, which has long been a stable energy source, still provides about 14% of global electricity, while nuclear energy remains a key low-carbon option at 9%.
However, energy generation is deeply intertwined with water resources—hydropower depends on stable water availability, and many power plants require significant water for cooling, making efficiency and conservation critical considerations.
As global energy demand rises, developing new energy generation technologies is essential to balancing sustainability, reliability, and affordability. Innovations across hydrogen, solar, wind, waste-to-energy, fuels, nuclear, water conservation in energy, hydropower, and ocean energy—all shaping the future of clean electricity production.
Notable startups to watch out in Energy Generation
Fervo Energy (US) is tapping into the earth’s heat to unlock the full potential of geothermal energy. By extracting and converting underground heat into electricity, they’re delivering carbon-free power. In December 2024, they raised $135M in Series D funding.
Tandem PV, a US-based solar technology company, is advancing low-carbon electricity generation with cutting-edge perovskite-based solar panels designed for large-scale deployment. The company secured $50M in Series A funding from various investors in March 2025.
French start-up Renaissance Fusion is betting big on nuclear fusion, developing tech that could make limitless, low-cost electricity a reality. The company raised $34M in Series A funding in March 2025, backed by Lowercarbon Capital and others.
Grid 101
The electrical grid is a vast, interconnected network that delivers electricity from producers to consumers. It consists of power generation facilities, transmission lines, substations, and distribution systems that ensure electricity reaches consumers. As renewable energy sources like solar and wind become more dominant, grids must adapt to accommodate intermittent power supply while maintaining stability.
To modernize the grid, emerging innovations focus on grid balancing, congestion management, and smart grids to improve efficiency and flexibility. Grid infrastructure improvements, real-time monitoring systems, and advanced grid protection technologies are essential to ensure resilience against outages, cyber threats, and extreme weather events.
Notable startups to watch out for in Energy Grids
US-based Veir is developing next-generation High-Temperature Superconductor (HTS) power lines to improve electricity distribution. Vier has raised $75M in Series B funding in January 2025 from Munich Re, Microsoft’s Climate Innovation Fund, Breakthrough Energy Ventures, and others.
Gridware builds smart sensors that help utility companies with real-time grid monitoring and fault detection, enhancing grid reliability. The company raised $26.4M in Series A funding from Sequoia Capital in January 2025.
Dutch-based Sympower optimizes energy consumption by connecting energy-intensive industrial equipment to the grid for demand response and balancing. Sympower raised $22.6M in Series B funding in November 2024 from Activate Capital, European Investment Fund, Rubio Impact Ventures, and others.
Energy Storage 101
Energy storage plays a crucial role in balancing electricity supply and demand by capturing excess energy and deploying it when needed. Common technologies include pumped-storage hydropower, lithium-ion batteries, and compressed air energy storage (CAES), each offering different capacities and response times. In 2023, global energy storage capacity additions nearly tripled, marking the largest year-on-year gain on record. This significant growth underscores the expanding role of battery storage in enhancing grid flexibility.
New innovations are shaping the future of energy storage, including long-duration energy storage (LDES) for maintaining supply over extended periods. Other innovations include advanced supercapacitors for high-speed energy discharge, and intelligent energy storage management systems that optimize storage deployment and integration with the grid.
Energy storage startups that should be on your radar
Form Energy is advancing multi-day electricity storage with iron-air batteries for grids, helping manage renewable energy fluctuations and providing low-cost energy solutions. They secured $405M in Series F funding in October 2024 from various investors.
Iontra Inc is a US-based battery charging technology firm. Its patented technology enhances lithium battery performance while maintaining long-term health by preventing electrode plating and dendrite growth. Iontra secured $45M in Series C funding from Volta Energy Technologies in November 2024.
Terralayr is a Swiss-based energy storage company that aggregates battery storage assets through a cloud-based platform enhancing energy flexibility. They raised $67.6M in Series A from Earlybird Venture Capital, Norrsken VC, Picus Capital, Rive Private Investment, and Creandum.
End-Use Efficiency 101
End-use efficiency is about reducing energy consumption while maintaining the same level of service across buildings, transportation, and industrial processes. This includes adopting energy-efficient appliances, improving insulation, optimizing heating and cooling, and integrating smarter energy management systems. Improving energy efficiency could contribute nearly half of the emissions cuts required by 2030 to stay on track for Net-Zero by 2050 under the Paris Agreement.
Emerging technologies are driving new gains in data center energy management, waste heat recovery, superconductors for low-loss transmission, and AI-driven energy optimization. Additionally, energy management systems (EMS) and energy trading and risk management platforms are enabling businesses and utilities to make real-time, data-driven decisions to boost efficiency.
Startups in Energy Efficiency and Management to watch
US-based start-up Crusoe converts stranded energy sources like methane flares or excess power from renewable sources into power for energy-intensive computing. Crusoe raised $600M in Series D funding in December 2024 from Founders Fund, Fidelity Investments, Nvidia, and Valor Equity Partners.
Spanish company Submer specializes in immersion cooling for data centers, reducing energy use and eliminating conventional air-cooling. Submer raised $55M in Series C funding in October 2024 from M&G plc, Planet First Partners, Norrsken VC, and Mundi Ventures.
Qvantum Energi, a Swedish company, develops high-efficiency carbon-neutral heat pumps for commercial buildings and residential properties, enabling urban decarbonization. The company raised $96M in Series C funding in January 2025 from Thomas Von Koch, IMAS Foundation, Mats Rahmstrom, Climentum Capital, and others.
Climate Tech is a key driver of the energy transition
Climate Tech is at the heart of the energy transition, driving innovation across the entire value chain — from generation and storage to grid modernization and efficiency solutions.
As investment in clean energy solutions continues to grow, strategic capital deployment will be crucial to overcoming infrastructure challenges. Identifying high-impact opportunities requires access to reliable, data-driven market intelligence.
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