In 2024, venture capital investment in climate technology declined to $37.8 billion, nearly 40% below the peak reached in 2021. Projected trends indicate that investments may drop further in 2025 due to policy changes impacting sectors like energy and transportation. Although challenges such as tariffs exist, many venture investors remain optimistic about the sector's future. The investment boom began in 2021 with supportive policies from the Biden administration, fostering significant venture capital interest that peaked in subsequent years, particularly due to the Inflation Reduction Act and other finance initiatives.
Investment in climate tech reached only $37.8 billion in 2024, marking a nearly 40% decline from the all-time high of 2021, as venture capital investment continues to fall.
Even with current challenges like tariffs and shifting policies, many venture investors in climate tech express confidence in the long-term potential of the sector.
The surge of investment in climate tech began in 2021 when policies under President Biden created a favorable environment for renewable energy and related technologies.
The Inflation Reduction Act of 2022 and tax incentives for clean energy were significant contributors to high venture capital deal values, which peaked in 2021 and 2022.
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