Today I’m running through the stats to see how climate funding has fared so far in 2025. The top line: there’s a significant drop compared to the first half of last year, but the drop-off is predominately for late-stage debt deals — early-stage investing remains relatively isolated from the dip. Scroll on for more.
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🇪🇺 The European Union is set to face a tougher challenge passing its ambitious goal of cutting emissions by 90% before 2040, after a group sceptical of climate change was nominated as the lead negotiator for the bloc’s assembly,Bloomberg reports.
Climate tech’s ‘shift to quality’?
Funding for European climate tech companies fell 71% in the first half of this year — with €6.2bn invested across debt and equity deals. That’s a significant drop on the €21.7bn invested in the first half of 2024.
The sector has faced mounting pressures in recent years, with industry leaders likeNorthvolt collapsing, while the White House under US president Donald Trump has sought to undermine green initiativesin favour of fossil fuels.
The debt drop-off
The drop was largest among late-stage debt deals: €14bn in debt was invested in H1 2024, compared to €748m in H1 2025.
The debt figure for the first half of 2024 is primarily made up of four deals: a €5bn round for Swedish gigafactory Northvolt; a €4.2bn round for Swedish metal producer Stegra; a €1.3bn round for French gigafactory Verkor; and €1.1bn for German domestic energy tech provider Enpal.
“Large debt deals often come in waves, but this was extraordinary even by those standards,” Reid Carroll, investor at climate-focused fund SFV, says of H1 2024.
The largest debt deal so far this year is a €500m round for German company Bees & Bears, which provides domestic energy tech solutions.
“We see the last 12 months as a bit of a hangover for big deals in the space,” says Carroll, “but in the background we are continuing to see availability of venture debt and asset backed lines for companies with solid revenues and strong equity raises.”
Burhan Pisavadi, investor at PT1 Ventures, which finances climate-focused real estate and infrastructure companies, suggests part of the later-stage dip could be down to some investors moving their focus to hyped grabbing sectors.
“The hype eye of Sauron has left climate behind and is now looking at industrialisation, rearmament, manufacturing and robotics,” he says
The decline in debt deals could also be because projects which received funding are now building rather than fundraising, Pisavadi says. “The need for new debt has fallen until the next generation of projects comes online.”
“What we are seeing in the climate space is a shift to quality,” says Matthew Blain, investor at climate-focused fund Voyager Ventures.
“The best companies are raising eye-popping rounds at high valuations, particularly in buzzy spaces like data centre cooling, energy efficient chip design, manufacturing productivity, photonics and B2B energy procurement. Whilst appetite for capital-intensive companies requiring big projects and large amounts of debt has significantly decreased over the last 18 months."
While debt has seen the biggest drop off, things look better for equity investment — find those stats here.
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Milan-based Tulum Energy, which focuses on producing clean hydrogen solutions for industrial applications, raised €22.9m in seed funding. TDK Ventures and CDP Venture Capital led the round and were joined by investors including Doral Energy-Tech Ventures, Mito Tech Ventures and TechEnergy Ventures.
Leeds, UK-based AssetCool, which develops photonic coatings to boost the capacity of overhead power lines, raised €11.5m in Series A funding. Energy Impact Partners led the round and was joined by investors including Extantia Capital, Taronga Ventures and Mercia Ventures.
Paris-based Solarock, a solar panel installation startup, raised €7m in funding. Pale Blue Dot, Noa, Ring Capital and Kima Ventures participated in the round.
Weesp, Netherlands-based Solarix, which designs coloured solar panels for building facades, raised €4.2m in funding from investors Rom InWest and VP Capital, and €1.3m from the National Growth Fund.
Baden, Switzerland-based Crosstown H2r, developers of technology which enables gas turbines to run on renewable fuels, raised €2.5m in seed funding. 2100 Ventures, Climate Insiders, Unruly Capital and Sdac participated in the round.
Lisbon-based BM2Solar, which integrates storage solutions into photovoltaic plants, raised €2m in Series A funding. Axon Partners Group led the round and was joined by investors including Inclimo Climate Fund and Black and Blue Holdings.
Leiden, Netherlands-based Currentt, which develops an energy management system for households to address grid congestion, raised €1.7m in pre-seed funding. Rockstart Energy Fund led the round.
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