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Climate-tech founders can still raise capital in an AI-focused market, but the strongest pitch is not a climate label—or an AI label. It is a credible commercial case: who pays, what evidence shows they will buy, what milestone the round will fund, and which kind of capital fits the risk. Recent data points to climate investment continuing while capital concentrates in fewer, larger deals; it does not show that funding has disappeared or that every climate startup needs an AI story.
Is climate-tech funding still available?
Yes, though headline totals can obscure how difficult fundraising may be for an early-stage company. In its April 2026 report, Silicon Valley Bank (SVB) put U.S. climate-tech venture investment at $29 billion for 2025, the third-highest year on record behind 2021 and 2022. SVB also reported that ten large late-stage deals captured 28% of that investment. A large aggregate market can therefore coexist with a much harder search for a first institutional round or a smaller early-stage check. SVB, The Future of Climate Tech 2026
A separate measure illustrates why figures should not be combined casually: the State of Climate Tech H1 2026 report page says funding held near $41.3 billion as deal count fell to a record low, with capital concentrating in fewer, larger rounds and late-stage equity gaining share. This is a different report, period, and scope from SVB’s U.S. annual figure, so the totals are not directly comparable. State of Climate Tech H1’26 Report
Investor attention is also not uniform. A February 2025 KfW Research survey of German venture investors found climate technologies were no longer among the highest expected growth areas for 2025, while AI, cybersecurity, and defence received more attention. That is evidence about surveyed expectations in Germany at that time—not a verdict on every investor, geography, or later market. KfW Research
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The fundraising implication is to make the company’s fit with a specific investor mandate obvious, rather than assuming that a broad climate trend—or a broad AI trend—will carry the pitch.
How do I raise the next round?
Start with the milestone the money buys, then show why reaching it changes the company’s risk or value. Sandra Malmberg, a partner at EQT Ventures, described fundraising as a process of finding the right match between investor and founder, which can take months in the relatively new climate-tech sector. McKinsey’s interview on The Climate Brick
1. Define the milestone before the raise size
State what the next financing will accomplish and what uncertainty it removes. Depending on the company, that could mean technology readiness, a paid pilot, repeatable deployment, lower manufacturing cost, regulatory approval, or stronger unit economics. Tie the requested capital and time period to a concrete plan: what will be built or proven, by when, and what evidence will show success.
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For novel technologies, readiness and early commercial partners matter. A pilot is more persuasive when it has a named buyer, a defined scope, success criteria, and a credible path to a follow-on order. Avoid treating a nonbinding pilot discussion as revenue or contracted demand.
2. Make the commercial proof easy to assess
Investors need to understand who pays, why the customer acts now, and what prevents adoption. Explain procurement cycles, integration needs, permitting or regulatory hurdles, deployment constraints, and the economics for the buyer. Distinguish clearly among a paid customer, a paid pilot, a nonbinding pilot, a deployment partner, and a general conversation.
Evidence of repeatability matters as much as a first demonstration: show whether later customers can be served with similar costs, timelines, and performance. The 2025 Australian Climate Tech Industry Report summary calls for more pilots, first-of-a-kind deployments, repeatable deployments, and scaled, profitable companies. Its findings concern surveyed Australian companies and should not be treated as a global funding forecast. CEFC summary of the 2025 Australian Climate Tech Industry Report
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3. Show the operating numbers behind the plan
Where the company has reliable figures, give investors dated and consistently defined measures for gross margin, burn, runway, customer conversion, deployment cost, manufacturing cost, and unit economics. Pair each figure with its time period and explain what is included. A clear bridge from current performance to the financing milestone is more useful than a collection of uncontextualized metrics.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsSVB reported that 52% of VC-backed climate-tech companies reduced net burn year over year in 2025, linking the trend to improved gross margins and attention to unit economics. That sector statistic is context, not a forecast for an individual startup. SVB, The Future of Climate Tech 2026
4. Explain why the capital source fits the risk
Do not assume every company expense should be financed with venture equity. Map the company’s needs across the financing routes that may suit its stage, jurisdiction, and technology: grants or public funding for eligible research and development; venture equity for company growth; strategic corporate capital where there is a genuine commercial fit; and project-oriented finance, infrastructure debt, or tax equity where a defined asset or deployment can support those structures. These are distinct instruments, not interchangeable alternatives, and not every startup will qualify for or benefit from each one. McKinsey’s Climate Brick discussion and the Venture Climate Alliance both emphasize matching financing options to a company’s scaling path. McKinsey on The Climate Brick Venture Climate Alliance: Climate Tech Scaling
| Route | Typical level and fit | What to evaluate |
|---|---|---|
| Grants and public funding | Often supports eligible R&D or public-interest work; eligibility depends on the program and jurisdiction. | Application timing, eligible costs, matching requirements, reporting, and whether the award can fund the milestone. |
| Venture equity | Company-level capital for growth and risk-taking; suited to businesses with a potential venture-scale path. | Dilution, investor mandate, ownership implications, runway, and the milestones expected before the next round. |
| Strategic corporate capital | May support a company with a relevant corporate investor, customer, or deployment partner. | Commercial terms, strategic rights, decision-making timeline, and whether the relationship creates customer value beyond the check. |
| Project finance, infrastructure debt, or tax equity | May fit a defined project or asset rather than general startup operating costs; availability and suitability depend on jurisdiction and project economics. | Repayment or project cash flows, asset maturity, collateral or eligibility, close timeline, and documentation burden. |
5. Approach strategic investors with a specific role in mind
Strategic capital is worth exploring when a company can name the commercial value to the corporate investor—such as customer access, deployment capability, or a relevant supply-chain relationship. In the State of Climate Tech H1 2025 summary, strategic investors participated in six out of ten deals involving high-impact emerging technologies. That finding suggests a possible route to investigate, not a promise that a strategic investor will participate in a particular raise. State of Climate Tech H1 2025
6. Match the investor list to geography and mandate
Before contacting investors, filter for the company’s location, stage, subsector, likely check size, and the investor’s current mandate. Definitions of climate tech, policy support, market maturity, and capital availability vary by region. KfW’s survey concerns Germany, while the Australian report covers its own surveyed ecosystem. FSD Africa’s 2026 report describes African ClimateTech markets at different stages of maturity, reinforcing the need for local rather than generic assumptions. FSD Africa et al., The State of ClimateTech in Africa 2.0
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Should a climate-tech startup add AI to its pitch?
Only if AI has a demonstrable role in the product, operations, customer economics, or demand for the company’s solution. Rebranding a climate company as AI-enabled without a real technical or commercial connection can make the pitch less credible.
There are legitimate connections in both directions. SVB’s April 2026 report points to AI’s energy needs and electrification as sources of demand for climate solutions. A company supplying power, storage, grid reliability, cooling, water efficiency, or another relevant capability can explain the connection by showing how AI infrastructure affects a buyer’s needs or purchasing case. Separately, the H1 2025 State of Climate Tech summary describes AI-enabled climate solutions as an area of activity. Neither fact means that AI is relevant to every climate startup. SVB, The Future of Climate Tech 2026 State of Climate Tech H1 2025
If AI is genuinely part of the business, specify what it does, what input or workflow it changes, and what measurable outcome follows. If it is not, focus on the customer problem and climate outcome the company actually delivers.
What are the most critical milestones on our scaling journey?
The answer depends on the technology and business model; there is no universal milestone sequence. Choose the next proof point that removes the most important barrier to adoption or financing, and define it in terms an investor can verify.
- Technology risk: demonstrate that the product performs at the required readiness level under relevant operating conditions.
- Customer risk: secure a paid pilot or other evidence that a named customer will commit resources to testing or adoption.
- Deployment risk: show that installation, integration, permitting, and delivery can be repeated on a realistic timeline.
- Cost risk: document progress toward manufacturing, deployment, or operating costs that support the buyer’s economics.
- Scale and financing risk: establish that the next growth stage can be funded by a suitable mix of company capital and, where appropriate, project-level financing.
For each milestone, put an owner, target date, budget, success measure, and consequence of success into the operating plan. This lets investors see not only what the company hopes to achieve, but how the current round advances it.
Which funding resources may help?
Some programs and guides may be relevant, but their current availability and eligibility must be checked directly because they can change.
Quick Recap
- Venture For ClimateTech describes early-stage commercialization support and up to $50,000 in non-dilutive funding. Check current cohort status, geography, stage criteria, and award terms before relying on it.
- Venture Climate Alliance: Climate Tech Scaling describes a capital-stack guide, sector-specific scaling pathways, and market guides. Confirm that the resources and any participation routes remain available.
- The Climate Brick, discussed by McKinsey, is an open-source climate startup fundraising and scaling manual.
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