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Global Climate Tech Funding Drops 40% in 2024; Grid and Nuclear Tech Surge
Mar 17, 2025
Global climate tech investments witnessed a steep 40?cline year-over-year (YoY) in 2024, largely due to a 61% drop in electric vehicle (EV) deals, according to the CB Insights Climate Tech Report 2024. Despite the downturn, grid modernization and nuclear energy emerged as the fastest-growing sectors, driven by rising energy demands from AI data centers.
Key Takeaways from the Report
- Sharp Decline in Climate Tech Funding (-40% YoY)
- Global climate tech funding fell 40% compared to 2023.
- Mega-round deals (over $100M) dropped 47%, signaling reduced investor appetite for large-scale projects.
- However, grid modernization and clean energy solutions for AI-driven power demands attracted notable investments.
- Electric Vehicle (EV) Sector Faces Major Setback (-61% YoY)
- EV startup funding saw a record-breaking 61?cline, the sharpest fall within climate tech.
- The sector struggled with falling consumer demand and rising production costs.
- The number of disclosed deals plummeted from 630 in 2023 to just 243 in 2024.
- Grid and Nuclear Tech Among Fastest-Growing Sectors
- 7 of the top 10 high-potential climate tech markets focused on power grids and nuclear energy.
- AI data centers’ soaring electricity demands accelerated investments in grid storage, small modular reactors (SMRs), and virtual power plants (VPPs).
- Grid and nuclear companies outperformed other sectors based on Mosaic scoring, an industry benchmark for growth potential.
- Climate Tech Mergers & Acquisitions Hit 4-Year Low (-25% YoY)
- Only 284 climate tech M&A deals were recorded, marking the lowest level since 2020.
- Investor skepticism toward Environmental, Social, and Governance (ESG) initiatives contributed to fewer strategic acquisitions.
- U.S. Leads in Climate Tech Investments, but Asia and Europe Are Catching Up
- Q4 2024 Regional Funding Breakdown:
- U.S.: $4.5B (139 deals)
- Europe: $1.5B (136 deals)
- Asia: $0.9B (122 deals)
- Private equity and venture capital are increasingly shifting toward Asia and Europe, signaling a more globalized approach to climate innovation.
- Q4 2024 Regional Funding Breakdown:
Despite the funding slowdown, the growth in grid and nuclear technologies highlights a shift toward energy infrastructure investments, ensuring sustainable power solutions for the AI-driven future.