Funding for climate tech in the United States held steady in the first half of 2025, but there’s been a decisive shift in where money is going, according to a sweeping analysis released at New York Climate Week by Net Zero Insights.

Even as government-backed activity has slowed, spending in the sector is still increasing: NZI tracked $15.3 billion worth of investments in the first half of this year, compared to $11.4 billion in the first half of 2024. The bulk of investments have been equity deals.

But that capital has become increasingly concentrated; investors have been more focused on later-stage, technology-ready companies, and have therefore made fewer but larger deals, the report found.

Early-stage funding experienced a significant drop compared to last year, with seed deals down 12.8%, and Series A deals down 12%. Series B deals, in contrast, were up 26.8% — but Series C and later deals were where the bulk of activity was happening. Those later-stage rounds jumped 33.3% over the first half of 2024, and while valuations increased across the board, that increase was most notable for series C and D rounds.

Industrial decarbonization surges

Energy generation systems and infrastructure have together represented the largest share of U.S. funding since 2021, when the category pulled ahead of transportation and mobility funding — and 2025 was no different. Thanks in part to AI-driven demand for reliable power, and a wave of grid modernization projects, that sector  received 33.2% of funding in the first half of this year.

However, industrial decarbonization and manufacturing companies have also experienced a surge. The sector notched 19.3% of total funding, compared to 9.6% in 2020. In the near term, NZI notes, demand is likely to hold strong for cost-saving deployments, like efficiency software, process electrification, waste-heat recovery, and some low-carbon materials projects. Further out though, with less federal R&D and demonstration funding available, capital-intensive breakthroughs and scale-ups will be challenging.

Another dark horse in 2025 is what NZI calls “nature tech and climate risk,” which includes water treatment, ecosystem management efforts, disaster risk management, climate risk assessment, and environmental monitoring, among other things. That sector experienced a marked jump in 2025, up to 13.3% of total funding after holding relatively steady at around 5.5% for the prior four years.

Domestic strategic investors, including the big tech players, demonstrated an increasing willingness to invest in overseas venture deals, as U.S. policy uncertainty has continued.

According to NZI data, the level of overseas venture investments was at an all-time low right after the IRA was introduced in August 2022. Now though, that trend has reversed. Overseas venture deals were at an all time high in the first half of 2025, reaching nearly 60%.

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