Material Discovery Investment Trends in 2025

As the climate emergency deepens, demand for minerals essential to renewable energy technologies such as solar panels, wind turbines, and electric vehicles is accelerating.

This surge in demand is outpacing current production capacity, and without significant new investment, supply shortages could undermine the progress towards global energy transition. Estimates suggest that current investment in mining projects is falling short by an estimated $225 billion, leaving production levels well below what is needed to meet the Paris Agreement’s 1.5°C target.

To address this resource constraint and accelerate decarbonization, we urgently need innovation within materials discovery. This requires significant capital directed toward technologies such as high-quality materials databases, advanced computational modeling, and self-driving labs.

This final article in our materials discovery series examines how capital is being deployed in 2025 to accelerate the development of novel inorganic materials. Building on our earlier coverage of breakthrough innovations and emerging startups, it explores where funding is flowing, who is investing, and how these trends are shaping the future of sustainable materials innovation.

Materials discovery investment is carried forward by equity and grant

Materials discovery in Climate Tech is driven by two primary sources of capital: equity financing and grants.

Equity investment in the sector has fluctuated year-on-year, but the overall trend points to steady growth from $56 million in 2020 to $206 million by mid-2025. This upward trajectory indicates a sustained flow of private capital into materials discovery and a growing confidence in the sector’s long-term potential.

Grant funding has picked up, particularly over the past two years. Grants saw significant growth in 2023, followed by a near threefold increase in 2024, rising from $59.47 million to $149.87 million.

Key contributors to this surge include Infleqtion (USA) receiving $56.8 million in 2023 from UK Research and Innovation (UKRI) for its work in quantum technology.

In 2024, this was further fueled by:

• Quantum computing company Infleqtion receiving an additional $1.15 million in September and $11 million in December
• Lithium-ion battery materials manufacturer Mitra Chem (USA) securing a $100 million grant from the U.S. Department of Energy to advance lithium iron phosphate cathode material production
• Advanced materials company Sepion Technologies (USA) and concrete technology company Giatec (Canada), each receiving $17.5 million in funding

Surge in pre-seed and seed funding signals strong interest 

Investment in materials discovery has largely concentrated at the pre-seed and seed stages, where startups are developing early prototypes or validating novel approaches such as computational modeling and new materials platforms.

Early-stage momentum carried through into 2024 but has since moderated, pointing to more selective scaling decisions. Late-stage deals remain limited, reflecting the sector’s early maturity and the inherently long timelines required for commercialization. 

It remains to be seen whether the 2025 dip across all funding stages reflects a normalization of activity or a broader decline in interest within the sector.

Government and corporate backing remains steady

Venture investors have consistently led deal activity in materials discovery, with deal volume peaking in 2024.

While VC participation has varied year to year, it has grown in absolute terms, rising from just seven deals in 2020 to 55 in 2024. However, by mid-2025, activity has slowed to less than one-third of last year’s pace, suggesting a temporary cooling after a period of strong activity.

Corporate investors have maintained steady involvement, likely driven by the strategic relevance of materials innovation to long-term R&D goals and sustainability agendas. Strategic investors were most active in 2022 and 2023, though participation has moderated since. Early signs in 2025 point to a possible rebound.

Government support has remained stable throughout, providing consistent backing regardless of market shifts. While VC firms dominate overall deal activity, the broader investment landscape is increasingly shaped by contributions from corporates and public entities signaling a collaborative approach to advancing materials discovery.

Materials discovery applications captures the bulk of investment

Within the broader materials discovery landscape, several sub-segments have attracted varying levels of investor attention:

Materials Discovery Applications

• Has attracted the largest share of capital with a cumulative $1.3 billion in funding
• This is largely driven by the $1.2 billion acquisition of Chryso by Saint-Gobain in 2021, a landmark deal in construction chemicals aligned with advanced materials integration
• While no new funding has been recorded in 2025 so far, the segment’s historical performance highlights sustained investor interest in technologies that directly support decarbonization

Computational Materials Science and Modeling

• Shows steady growth, rising from $20 million in 2020 to $168 million by mid-2025
• Reflects growing confidence in simulation-based platforms that accelerate R&D and reduce time-to-market for novel materials

Materials Databases

• Recorded a notable uptick in 2025 with $31 million in funding
• Indicates rising investor recognition of data infrastructure and AI-enablement as critical components of materials discovery workflows

Robotics for materials discovery

• Remain a niche focus with minimal funding to date
• Suggests that while automation holds promise, broader investor adoption is still in early stages

US dominates global investment in materials discovery

North America continues to lead global investment in materials discovery, with the United States commanding the majority share of both funding and deal volume over the past five years. Investment activity in the U.S. peaked between 2022 and 2024. 

Europe ranks second in both funding and transaction count. The United Kingdom stands out with consistent year-on-year deal flow, underlining its strategic commitment to advanced materials innovation. In contrast, other key European markets such as Germany, the Netherlands, and France exhibit more sporadic activity, suggesting that funding is still concentrated around specific companies or projects rather than broad-based sectoral support.

Overall, while global participation is increasing, capital remains heavily concentrated in the U.S. and Europe, underscoring their leadership in the emerging materials innovation landscape.

Looking to explore the Materials Discovery landscape in greater depth?

Book a demo to access our  Materials Discovery Market Snapshot, a comprehensive report featuring expert analysis on technology trends, market activity, evolving regulations, and detailed market maps. Dive into insights on the companies, deals, and investors driving this rapidly evolving space, and gain a deeper understanding of how the next novel material is developed and commercialized.