Investment Firm Climate Tech Partners Gathers $50 Million to Support Businesses Pursuing Decarbonization through Innovative Technologies
In the first half of 2025, global investment in climate technology experienced a 19% decline compared to the previous year, signalling a cooling in the sector. However, this contraction is not indicative of a slowdown in the climate tech industry's evolution. On the contrary, the sector is transitioning towards more mature, capital-intensive solutions, backed by non-dilutive financing and supportive public policy frameworks.
The U.S. continues to dominate the climate tech investment landscape, accounting for 51% of global funding. Projections suggest a 12% market growth in 2025, underpinned by commercial partnerships, despite some policy funding cuts. Europe, while experiencing slower overall funding, is intensifying its focus on decarbonization and AI-enhanced innovations, indicating a more mature and policy-driven climate tech ecosystem.
Venture capital is increasingly focusing on deep-tech startups that integrate hardware, software, and data to develop scalable, measurable climate solutions. These startups benefit from favourable policy environments globally, including incentives, carbon pricing, and green procurement mandates.
Investments are concentrated in three key areas: electrification technologies, sustainable fuels like hydrogen, and next-generation grids enabled by AI and digitalization. Electrification investments are directed towards AI-based energy optimization platforms and battery technologies, including battery recycling efforts, which play a critical role in enabling sustainable electrification in transport and grids.
Sustainable fuels, particularly clean hydrogen projects, are attracting significant investor interest. The public and private sectors are supporting startups developing these technologies, with a view to reducing emissions and transitioning towards a cleaner energy future.
Next-generation grids are receiving funding for innovation in grid modernization, integrating AI for enhanced energy management, and infrastructure to accommodate variable renewable sources with better reliability and resiliency.
Notable large investments in related breakthroughs include nuclear and fusion energy projects, such as Pacific Fusion ($900 million) and X-energy ($682 million), and Germany’s portfolio, which includes a strong orientation towards carbon capture, utilization, and storage (CCUS) and hydrogen projects, focusing on industrial decarbonization and aligning with their strategic industrial strengths.
Amidst this evolving landscape, Climate Tech Partners (CTP) has reached the first close of a new fund. The new fund is anchored by separate $15 million commitments from Australian Ethical Investments (AEI) and the Clean Energy Finance Corporation (CEFC). CTP focuses on deploying capital into early-stage technologies that address industrial decarbonization across energy, transport, mining, and industry.
According to Patrick Sieb, Co-Founder of Climate Tech Partners, the alignment of technology readiness, corporate demand, and policy presents a powerful moment for investment. CTP targets companies at Series A rounds and has identified priority investment areas including gridtech, low carbon fuels, and climate adaptation technologies.
Patrick Sieb has highlighted bipartisan backing for energy security and sustainable fuels in the US as a sign of the durability of this investment opportunity. He also stated that breakthrough climate tech, including electrification, sustainable fuels, and next-gen grids, is gaining real traction.
CTP has now secured over $50 million in commitments, despite a challenging environment for tech and venture capital fundraising. The recent Australian election provided additional policy certainty for the cleantech sector. The EU continues to support emissions reductions and green innovation, further propelling the climate tech sector towards a sustainable and cleaner future.
Science and environmental-science play crucial roles in the development of climate technology, as evidenced by the increasing focus on deep-tech startups that integrate hardware, software, and data to create scalable, measurable climate solutions. These startups benefits from favorable policy environments, including incentives, carbon pricing, and green procurement mandates (decarbonization). Additionally, technological advancements, such as AI-enhanced innovations, are being prioritized by Europe in their transition towards a cleaner energy future (technology).
