ClimateTech
ClimateTech covers the hardware, materials and services supporting decarbonisation and the energy transition - alternative batteries, alternative protein, direct air capture, advanced geothermal, low-carbon fuels, energy storage and hydrogen - distinct from the pure energy-and-utilities software category covered in the software parent sector. The category absorbed over $90B in cumulative private capital between 2018 and 2024 per PitchBook, then saw a sharp downcycle through 2023-25 as interest rates rose, fossil-fuel demand stayed elevated and major projects (Northvolt, Hyzon, Stem) ran into financial difficulty. Even so, the IRA in the US and the EU's Net Zero Industry Act anchor multi-decade demand.
The sector spans advanced battery materials and cells, direct air capture and carbon removal, alternative fuels and hydrogen, advanced geothermal and nuclear, long-duration energy storage, and decarbonisation procurement platforms.
Revenue comes from one-off equipment and project sales, recurring power-purchase agreements and storage capacity payments, per-tonne carbon credit revenue, corporate carbon removal procurement contracts, government grants and tax credits, and SaaS subscriptions for the procurement and reporting platforms.
ClimateTech is part of Industrial technology.
$32B
Global market size
369
Public companies
Key VC investors
Key strategic buyers
How ClimateTech companies monetize?
Climate tech companies monetize through equipment and project sales, power purchase agreements and carbon removal contracts.
Equipment & project sales
One-off sales of fuel cells, electrolysers, batteries, DAC modules and geothermal equipment to project developers and industrial buyers. The anchor line for Bloom Energy, Plug Power and the hardware cohort.
Power purchase agreements (PPAs)
Long-duration contracts to deliver electricity or thermal energy at agreed prices. Standard in geothermal, fusion (Helion-Microsoft) and storage projects.
Carbon removal contracts
Multi-year per-tonne contracts for verified carbon removal sold to corporate buyers via Stripe Climate, Frontier and Watershed. Climeworks, Charm Industrial, Heirloom and Lithos sit here.
IRA tax credit monetisation
The IRA's 45Q (DAC), 45V (hydrogen), 45X (advanced manufacturing) and PTC/ITC credits are transferable and monetisable. Has become a material revenue line for project developers.
Storage capacity payments
Per-MWh or per-MW capacity payments paid to operators of grid-connected storage. Form Energy, ESS Inc, EnergyVault and Stem (NYSE: STEM, financial difficulty 2024) operate this way.
Decarbonisation SaaS
Subscription platforms for corporate emissions reporting, procurement and target-setting. Watershed, Persefoni and Sweep sit here.
ClimateTech valuations in May 2026
Public ClimateTech comps trade at 2.7x EV/Revenue. Median revenue multiple across ClimateTech M&A deals was 2.0x in the last 12 months. Median revenue multiple across ClimateTech VC rounds was 12x in the last 12 months.
2.7x
Median EV/Revenue as of May 2026 for public ClimateTech companies
16x
Tesla is the highest valued public ClimateTech company based on EV/Revenue (excluding outliers)
2.0x
Median EV/Revenue across ClimateTech M&A deals in the last 12 months
12x
Median EV/Revenue across ClimateTech VC rounds in the last 12 months
ClimateTech market segments
Climate tech spans advanced battery materials, direct air capture and long-duration energy storage.
Advanced battery materials & cells
Silicon anodes, solid-state and alternative-chemistry cells. Sila Nano (raised $375M Series H 2024), QuantumScape (NYSE: QS), Group14, Form Energy and Solid Power (NASDAQ: SLDP) lead. Northvolt (Sweden) filed for Chapter 11 in November 2024 and emerged in 2025 in a smaller, restructured form.
Direct air capture & carbon removal
DAC, mineralisation, BiCRS and ocean-based removal. Climeworks (Switzerland), Carbon Engineering (acquired by Occidental for $1.1B in 2023), Heirloom, Charm Industrial and Lithos sit here.
Alternative fuels & hydrogen
Green hydrogen, e-fuels, sustainable aviation fuel and methanol. Plug Power (NASDAQ: PLUG), LanzaTech (NASDAQ: LNZA), Twelve, Monolith and Electric Hydrogen (raised $380M Series C in 2023) lead. Hyzon Motors filed Chapter 11 in 2025.
Advanced geothermal & next-gen nuclear
Enhanced geothermal systems and SMR nuclear. Fervo Energy (raised $244M Series D in 2024, $206M Series E in 2025), Eavor and Sage Geosystems lead geothermal; NuScale (NYSE: SMR), X-energy and TerraPower lead nuclear.
Long-duration energy storage
Iron-air, flow, thermal and gravity batteries. Form Energy (raised $405M Series F in 2024), EnergyVault (NYSE: NRGV), ESS Inc and Antora Energy lead. The category sits on the IRA storage ITC and is a top utility procurement priority.
Decarbonisation procurement & reporting
SaaS platforms for emissions accounting, procurement and CSRD compliance. Watershed (raised $100M Series C in 2024), Persefoni, Sweep and Salesforce Net Zero Cloud sit here. Frontier (Stripe-led) and Milkywire run the carbon-removal procurement side.
Fractional CFO, financial modelling and deal advice for ClimateTech companies
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Capital raising
For bootstrapped and already-VC-backed entrepreneurs who are looking to raise late stage venture or growth capital.
M&A
For category-leading technology companies who are exploring exit alternatives with either financial or strategic acquirers.
Key ClimateTech KPIs to track
Capital raised, MW or tonnes deployed, PPA backlog and cash runway are the metrics investors track in climate tech.
| KPI | Definition |
|---|---|
| Capital raised | Cumulative equity, debt and grant funding. The first metric for any capital-intensive climate-tech company because revenue is typically smaller than capex through scale-up. |
| Revenue growth | Year-on-year revenue change. Standard once a company has commercial-scale deployments. |
| Gross margin | Separates software-led decarbonisation businesses (60-80%) from hardware-led players (often negative through scale-up, 10-25% at maturity). |
| MW or tonnes deployed | Cumulative installed power, energy capacity, or carbon removal volume. The cleanest unit-volume metric across the category. |
| PPA backlog | Signed but undelivered power purchase agreement and offtake contract value. The forward-revenue indicator for geothermal, hydrogen and storage developers. |
| LCOE / cost per tonne | Levelised cost of electricity (or removal) divided by output. The benchmark that all climate-tech players are measured against versus incumbents. |
| Cash runway | Months of operating cash at current burn. The most-watched metric across the cohort given the 2023-25 downcycle. |
| Government contract & credit value | DoE loan guarantees, IRA tax credit value and EU Innovation Fund grant awards. Has become a primary capital source for the category. |
Main ClimateTech players globally
The most active climate tech companies and category leaders globally.
| Company | HQ | Overview |
|---|---|---|
Climeworks climeworks.com |  Zurich | Largest pure-play DAC operator globally. Orca and Mammoth plants in Iceland total 40kt/yr nameplate capacity. Has raised over $800M cumulatively. Carried out staff cuts in 2025 and reduced expansion plans amid the carbon-removal market reset. |
Carbon Engineering carbonengineering.com |  Squamish | DAC developer acquired by Occidental Petroleum for $1.1B in 2023. Anchor technology partner for Occidental's STRATOS plant in Texas, the largest DAC facility under construction (500kt/yr nameplate). |
Form Energy formenergy.com |  Somerville | Iron-air battery developer building 100-hour energy storage systems. Raised $405M Series F in 2024 at over $1B valuation. Signed offtake agreements with Xcel Energy, Georgia Power and Great River Energy. |
Sila Nano silanano.com | Alameda | Silicon anode materials. Anchor automotive customer is Mercedes-Benz EQG. Raised $375M Series H in 2024 at over $3B valuation. Building Moses Lake WA scaled production facility with up to $375M DoE loan. |
QuantumScape quantumscape.com | San Jose | Listed on NYSE as QS. Solid-state battery developer; anchor partner is Volkswagen Group. Stock traded down over 95% from SPAC peak. First B-sample QSE-5 cells shipped to OEM customers in 2024. |
Northvolt northvolt.com |  Stockholm | European battery cell manufacturer. Filed for Chapter 11 in November 2024 after BMW cancelled a €2B order earlier in the year. Emerged in 2025 in a smaller form following restructuring under Scania and other strategic investors. |
Fervo Energy fervoenergy.com | Houston | Enhanced geothermal systems developer. Project Red Cape Station went commercial 2023; Cape Station Phase I PPA with Southern California Edison signed 2024. Raised $244M Series D in 2024 and $206M Series E in 2025. |
LanzaTech lanzatech.com | Skokie | Listed on NASDAQ as LNZA. Microbial gas fermentation for ethanol, chemicals and sustainable aviation fuel. Spun out LanzaJet for SAF; carried out staff cuts and restructured commercial strategy in 2024. |
Bloom Energy bloomenergy.com | San Jose | Listed on NYSE as BE. Solid-oxide fuel cells for on-site power. Strong pull-through from data-centre customers (signed a 1GW deal with American Electric Power in 2024) as hyperscalers seek grid-independent power. |
Watershed watershed.com | San Francisco | Carbon accounting and decarbonisation platform. Raised $100M Series C in 2024 at $1.8B valuation led by Greenoaks. Customers include Stripe, Airbnb and BlackRock; running anchor procurement platform for Stripe Frontier and corporate carbon removal demand. |
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Key ClimateTech market trends
Northvolt Chapter 11, hyperscaler clean-power megadeals and the SMR nuclear renaissance are reshaping climate tech right now.
Northvolt Chapter 11 and European battery reset
Northvolt filed for Chapter 11 in November 2024 after BMW cancelled its €2B order over delivery delays and the Goldman Sachs-led debt restructuring failed. Britishvolt liquidated in 2023; Italvolt scrapped; Verkor and ACC under pressure. The European battery thesis has reset toward fewer, more strategic plants. Dated November 2024.
Hyperscaler clean-power megadeals
Microsoft signed a 50MW Helion fusion PPA in 2023 and a Constellation Three Mile Island restart PPA in 2024; Amazon committed $500M+ to X-energy SMR; Google signed Kairos SMR PPAs; Meta committed up to 4GW of clean nuclear in 2024. AI data-centre demand is rewriting climate-tech offtake economics. Dated January 2025.
Direct air capture market correction
Climeworks announced significant staff cuts in 2025 and reduced expansion plans; Heirloom Series B was reset; the Stripe Frontier purchase commitments through 2024 were under-subscribed by buyers. The DAC category is moving from research to commercial scrutiny faster than incumbents expected. Dated February 2025.
Fervo and enhanced geothermal scale-up
Fervo's Cape Station broke ground in 2024 with a 400MW target. The DoE selected Fervo, Eavor and Sage Geosystems for the FORGE program; Chevron and Mitsubishi Heavy Industries both signed offtake or equity deals with EGS developers through 2024-25. Geothermal is the most-funded climate-tech category in 2025 alongside SMR nuclear. Dated July 2024.
IRA monetisation and the 2025 tax-credit cliff
The IRA's 45Q, 45V, 45X and PTC/ITC credits have funded scaled deployment of DAC, hydrogen, advanced manufacturing and storage. Republican-led proposals through 2025 to repeal or modify the IRA have pushed climate-tech developers to accelerate placed-in-service timelines and tax-credit transfers. Dated April 2025.
SMR nuclear renaissance
NuScale's UAMPS project was cancelled in late 2023, but X-energy raised $700M led by Amazon in 2024; TerraPower broke ground at its Kemmerer Wyoming plant; Kairos signed Google PPAs; Holtec announced a multi-unit SMR program. AI power demand has accelerated the SMR roadmap by years. Dated October 2024.
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