As the world’s largest economy and leading technology hub, the United States shapes global markets through its energy and industrial innovation. Today, U.S. climate tech policy and investment are undergoing major shifts, with the current administration redefining the energy transition narrative and placing new emphasis on clean technologies.
Yet, while national priorities continue to evolve, state-level action has emerged as a critical driver of progress. Individual states are advancing their own policies, objectives, and investment programs, bridging gaps in federal leadership and creating the conditions for private capital to flow into emerging technologies.
These efforts draw strength from each state’s unique advantages such as geography, infrastructure, universities, public institutions, and startup ecosystems. Together, they influence how new technologies are developed, tested, and scaled. As a result, funding is increasingly concentrating in a handful of states where strong policy frameworks and strategic priorities are setting the pace for U.S. clean energy and industrial innovation.
Leading regions in equity funding
Between 2020 and 2024, six states emerged as the most active in equity funding, each attracting between $5 and $10 billion. Washington, California, Colorado, Texas, New York, and Massachusetts are leading destinations for clean energy and industrial innovation. Among them, California, New York, and Massachusetts each surpassed $10 billion in equity funding during this period.
When these six states are grouped into broader regions based on their location, namely West, South, and Northeast, clear patterns emerge. Each region demonstrates distinct strengths and constraints in funding activity and innovation outcomes. These differences are shaped by policy frameworks, institutional depth, and the maturity of startup ecosystems.
Pre-money valuations at early and growth stages provide additional insight into how regions position climate technologies in the market. They reveal investor expectations regarding growth potential, commercial readiness, and the comparative attractiveness of regional ecosystems.
This analysis is conducted with Carta’s valuation dataset matched to Net Zero Insights taxonomy to understand where capital is flowing in the USA. Below, we discuss how Seed stage, Series A, and Series B median pre-money valuations have performed from 2020 to 2024.
Seed stage valuation
Median pre-money valuations at the Seed stage rose steadily across all three regions from 2020 to 2024.
The Western U.S. consistently saw the highest Seed valuations throughout the period. Its position is supported by dense founder networks, active technology transfer from universities, and a strong base of early-stage capital. Deal activity is particularly concentrated in clean transport, battery innovation, and grid technologies.
The South, led by Texas, posted the fastest growth, with pre-Seed valuations increasing three-fold from $6 million in 2020 to $15.5 million in 2024. This reflects the region’s expanding startup culture and the rise of new incubation hubs.
Additionally, it also highlights a shift in investor priorities. Once dominated by fossil fuel interests, the region is now attracting early-stage capital into clean energy. Additionally, investors betting on startups that can leverage existing energy infrastructure to scale cleaner technologies.
Series A valuation
Median pre-money valuations at the Series A stage increased across the three regions between 2020 and 2024. This indicates that companies reaching Series A achieved stronger market validation, clearer commercialization potential, and greater ability to attract growth capital.
The Southern U.S. led valuations in 2020 and 2024, despite a dip in the intervening years. The Western U.S. led in 2022, while the Northeast peaked in 2023. This trajectory highlights that Climate Tech companies in the south are more competitive in securing growth-stage capital for their technologies.
Compared with previous years, the South in 2024 presented a more attractive environment for early growth-stage investment compared to the Climate Tech startups in the West and Northeast.
In the Southern U.S., median pre-money valuations at both Seed and Series A stages have grown steadily from 2020 to 2024. This reflects a more selective approach to capital deployment and investor willingness to support longer development timelines.
Series B valuation
Median pre-money Series B valuations have trended downward over the past five years. While Seed and Series A valuations continue to rise, there is a decline in Series B valuations. IT reflects heightened scrutiny on commercial viability, technology readiness, and market adoption as companies approach growth and scale.
Regionally, the Western U.S. experienced growth in Series B valuations from 2020 to 2022, followed by a sharp decline in 2023 and 2024. In contrast, the Northeast and South maintained stable valuations, though consistently below the West, indicating steady but measured investor confidence.
The divergence between early-stage growth and later-stage investment pause suggests that while startups continue to attract funding early on, scaling and commercialization challenges influence later-stage valuation.
Regional dynamics shape capital flow
State-led momentum is reshaping the trajectory of the U.S. Climate Tech ecosystem. This regional competition for capital is resulting in distinct innovation patterns. These regional pre-money valuation trends highlight the critical role states play in shaping the U.S. climate tech ecosystem.
For investors, understanding these regional dynamics is key to identifying where capital is most likely to yield returns and where policy, ecosystem maturity, and market readiness intersect to advance climate technologies.
The data suggests that U.S. climate tech growth will increasingly depend on state-level leadership, sustained policy support, and the ability to convert R&D into commercially viable solutions.
Based on this data, US Climate Tech for the near term will not be determined by federal incentives alone. It will be driven by the states that can sustain policy certainty, convert R&D into deployment, and attract long-term capital.
Find out more about the policy tailwinds regional investment patterns in our latest U.S. Clean Energy & Industrial Innovation report.
