Energy startups have surpassed electric vehicle and battery manufacturers to become the leading sector for global climate-tech investment in 2024.
For the first time since 2020, energy startups have overtaken EV and battery companies as the top recipients of climate-tech venture capital funding worldwide. This shift comes as rising demand for artificial intelligence (AI) increases interest in technologies capable of powering data centers with lower emissions.
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According to a report by the market-analysis platform Sightline Climate, global venture capital investment in energy startups reached USD 9.4 billion in 2024, up 12% from 2023. Investment in geothermal startups nearly tripled to USD 558 million, while nuclear-energy investment nearly doubled to USD 1.9 billion.
This trend is taking place even as total climate-tech investment declined in 2024, with venture capitalists remaining cautious amid political uncertainty in the United States, a difficult business environment, and corporations reducing their carbon-reduction commitments.
Although global climate-tech startups attracted USD 30 billion in investment in 2024, the total is still 14% lower than in 2023. The previous year, 2023, had already seen a 24% decline. Sightline predicts that venture-capital funding will continue to remain lower rather than rising exponentially — a situation that could jeopardize the world’s ability to reach net-zero emissions.
However, researchers note that the sharp decline in 2023 is unlikely to repeat, as the sector stabilizes into a new “normal state.”
