Climate tech's early cheques shrink while clean energy capital hits records

Founders raising pre-seed and seed cheques now face specialist climate funds. Those funds are themselves struggling to raise.

More money now arrives from generalist investors, corporate buyers and public bodies instead. Those backers set different terms. For investors and policymakers, the split means headline totals can look healthy. The riskiest stage stays thin. Neither number captures the other. Apolarion is an EPFL spin-off founded by Jesus Poley and Luke Simons. It will put the money into first field trials and initial customer deployments. Its device uses cold atmospheric plasma to strip harmful microorganisms from seeds without chemical coatings. The device runs on air and electricity. Climate-specialist venture funds are on track to raise less than $1 billion this year, according to PitchBook data cited by Fortune. That would be their weakest showing since 2015. It is a fall from more than $10 billion in 2021. Fundraising at the label level has rarely looked worse.

BlackTech Capital's Catalyst Fund has reached a $500,000 first close against a $2 million target, the University of Toronto reported on 2 November.

Its first investments are Serenity Power and Kiwi Charge. Serenity Power is a University of Toronto spinout developing solid oxide fuel cells. Kiwi Charge is an electric vehicle charging company. The fund is being raised through Equivesto Canada. The minimum ticket is $10,000. BlackTech commits to making half its investments in women-led companies. Bryan Duarte co-founded BlackTech Capital in 2021 with Keyona Meeks. He argues the pipeline is not the problem. He points to more than $19 billion spent annually on R&D across Canada's higher education sector. "At BlackTech Capital, this isn't about philanthropy. For us, it is performance powered by purpose," he said. Venture and growth investment in clean energy startups hit a three-year high in 2025, according to Sightline Climate. Geothermal developer Fervo Energy raised $2.2 billion in its May IPO. It then signed a new power deal with Google.

Dawn Lippert of Earthshot Ventures told Fortune that 90 percent of the companies it backs have generalist tech investors as co-investors. The money did not disappear. It changed hands.

Utility-scale solar's global average cost fell roughly 90 percent between 2010 and 2023, according to the International Renewable Energy Agency. In 2024, U.S. heat pump shipments outpaced gas furnaces by 32 percent, the widest margin on record. Venture funding to Black-led startups in Canada fell to $10 million across 11 deals last year, the 2026 Black Startup Funding Report says. That is 0.15 percent of total Canadian venture capital. The report, published by BKR Capital and Rep Matters, puts the funding gap at an estimated $292 million.

The Singapore Economic Development Board says Singapore's venture capital industry has not made more climate tech investments. It partly blames a shortage of deals compared with other sectors.

The agency also cites high operating costs and a shortage of people with specialised hardware skills. The Green Climate Fund approved $1.97 billion for 21 projects at its latest board meeting. The approvals took funding for the year to a record $3.2 billion, executive director Mafalda Duarte told Reuters. That includes $682 million for six private-sector initiatives. Total investments now stand at $22.3 billion across 379 projects. They reach $86.4 billion once co-financing is included.

Its record on mobilising private money is the number to watch. The fund has historically mobilised $3 of additional resources for every $1 it invests, and $4.5 for private-sector projects. That rose to $9 last year, and Duarte wants multipliers above 10. To pull more in, the fund is developing co-investment platforms where sovereign and non-sovereign investors could team up in particular sectors, projects and markets.

The gap public money is meant to close remains wide. The Adaptation Gap Report 2025 estimated adaptation finance needs in developing countries at up to $365 billion a year by 2035. International adaptation finance from developed countries reached just $35 billion in 2024. That is around 10 percent of what is needed. The Green Climate Fund's approvals came ahead of COP31 in Turkey in early November. There Duarte is seeking a strong signal of political support for a strong replenishment. The fund says it has demand for more than $11 billion. It is preparing its third replenishment round. A first-ever policy would allow contributions from non-sovereign and alternative sources. It would broaden its base beyond national governments.

Apolarion will spend the Venture Kick money on facilities, equipment and personnel for its pilot programmes. The programmes start in Switzerland and Europe. The Catalyst Fund is still short of its $2 million target.