Cleantech Funding Takes A Hit Amid Economic Downturn

Cleantech Funding Takes A Hit Amid Economic Downturn

Cleantech Funding Sees a Mixed Year in 2024

The cleantech sector experienced a mixed year in terms of funding, with overall investment reaching its lowest point in four years. However, individual sectors showed diverse performance.

Battery technology and wind-solar power saw significant declines in funding, while carbon capture, storage, and reuse continued to boom. Hydrogen startup funding remained robust, with companies like Intersect Power and Form Energy securing massive investments from prominent firms like Google and T. Rowe Price.

The largest equity rounds of 2024 went to Fremont, California-based Pacific Fusion, which raised $900 million in Series A led by General Catalyst, and Intersect Power, which picked up over $800 million in financing led by TPG Rise Climate Fund and Google. Form Energy also secured a $405 million Series F, working on low-cost battery systems for renewable power-supported electric grids.

Climate-focused funds and strategic investors dominated the cleantech deal landscape, with Lowercarbon Capital and Breakthrough Energy Ventures leading the charge. These firms invested in at least 34 known financings each this year, per Crunchbase data. Chevron, a major oil company, also backed eight deals including its venture arms Chevron Technology Ventures and Chevron New Energies.

Debt financing saw a significant uptick, with at least five deals valued at $1 billion or more in 2024. This could indicate a maturing startup pipeline, as infrastructure-heavy companies turn to debt financing as they scale.

Investors are bracing for potential policy changes that could impact their portfolios and funding decisions. With a second Donald Trump administration incoming, cleantech investors are waiting for clarification on policy details affecting areas like electric vehicles, grid modernization, and fusion energy. However, some experts remain optimistic about the sector’s growth prospects, citing promising trends in energy efficiency, grid power optimization, and sensor-driven upgrades to water and irrigation systems.

Pacific Fusion’s technology could help pave the way to “limitless, clean, on-demand power” through pulsed magnetic inertial fusion, while Intersect Power is developing clean energy projects co-located with power-hungry facilities. Form Energy’s low-cost battery systems have also shown promise for renewable power-supported electric grids.

Overall, individual sectors in the cleantech sector continued to see significant growth and innovation despite a decline in overall investment.

Latest Posts