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As renewable energy grows and electricity demand surges, grid capacity is emerging as a major bottleneck, creating opportunities for startups tackling the decidedly less glamorous business of moving, managing and squeezing more power out of existing infrastructure.

Investors are taking notice. European energy startups raised almost €3.2bn in the first half of 2026, nearly as much as they did in the previous two years combined. June alone saw 23 deals, the busiest month in more than two years.

So where do VCs think the next opportunities are hiding? We asked five investors to name the early-stage energy startups they’re watching — with one important rule: they couldn’t pick their own portfolio companies.

Their choices span autonomous drones inspecting power lines, software trading household batteries and heat pumps and satellites beaming extra energy to other spacecraft.

Elsewhere today:

• Ex-LocalGlobe trio in early talks for new VC fund, sources say
• Tony Blair’s son seeks $200m for new defence startup

P.S. Sifted is now on WhatsApp! Get breaking news, sharp analysis and the biggest stories in European tech straight to your phone. Join the channel here.

From a 3-person startup to Series B: The Lexroom scaling playbook

In the Studio this week, Sifted is joined by Lexroom CEO and cofounder Paolo Fois to uncover the realities of scaling one of Europe’s fastest-growing legaltech companies. The episode explores how Lexroom is getting ahead by prioritising proprietary data and reveals the tactical decisions driving the company's growth.

🤝 A trio of former LocalGlobe investors is in early talks to raise a new fund, sources say.

👀 Former UK prime minister Tony Blair’s son Nick is seeking $200m for his new defence startup, according to reports.

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⚡️ 16 energy startups to watch, according to investors.

🇪🇺 South Summit 2026: Three trends shaping the future of European tech. (Sponsored by South Summit)

Introducing: Runway by Sifted

Our new monthly running club for London's tech crowd. Lace up for the first run on Tuesday August 25, 6:30pm in Hyde Park. Whatever your pace, whatever your job title, you're invited.

If you’d like to submit a deal, get in touch. 

Basel, Switzerland-based Vaderis Therapeutics, which develops therapies for vascular diseases, raised $152m in Series B funding. Goldman Sachs and TCGX led the round and were joined by investors including Omega Funds, EQT Life Sciences, Perceptive Advisors, Kalehua Capital, Medicxi and Droia.

Bristol, UK-based Vertical Aerospace, which develops electric and hybrid-electric vertical take-off aircraft for commercial aviation, raised £74m in funding from investors including Mudrick Capital Management and Yorkville Advisors Global.

Copenhagen-based Palette, which provides shared context and workflows across multiple AI agents, raised €3m in pre-seed funding. Ugly Duckling Ventures led the round and was joined by investors including Emblem and Acadian Ventures.

Zug, Switzerland-based Zerolook, which provides flight shopping infrastructure that predicts fares for high-volume AI searches, raised €1.6m in pre-seed funding. Playfair led the round and was joined by investors including Vento Ventures, TrueSight Ventures and Alpha Venture.