Climate Tech VC Fundraising: From Peak to Pause

In 2021, specialist climate tech VC funds raised a record $10B across 79 funds. Fast forward to 2025, and the picture looks very different:

- As of August, only $2.1B has been raised across 17 funds – a trajectory that would barely reach one-third of 2024’s total.

- Fund count has collapsed from 94 in 2022 to fewer than 20 so far this year.

- Mid-sized funds ($100–500M) are now carrying most of the market, while billion-dollar climate funds have virtually disappeared.

What happened?

📉 US policy uncertainty (tariffs, reduced federal climate support) froze fundraising in early 2025.

📉 Broader VC downturn means climate funds are competing for a shrinking pool of LP capital.

📉 Shift in fund sizes shows investors prefer mid-sized, more agile vehicles instead of mega-funds.

Still, it’s not all bad news. Even at today’s reduced levels, climate funds represent a growing share of global VC fundraising (3.8% in 2025 vs. <1% in 2015). And outside the US, European and Asian LPs remain committed to long-term climate strategies.

The market is cooling, but the fundamentals of climate tech haven’t changed: scaling batteries, renewables, efficiency, and resilience still require patient capital.

The real question is whether today’s smaller, more selective funds can deliver the breakthroughs that the $10B mega-funds of 2021 promised.

This post is based on the 2025 Climate Tech Funds Report by PitchBook.