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Alex Kugell
Key Takeaways
- Climate tech funding reached $40.5 billion in 2025, up 8% from 2024, though the distribution has shifted sharply toward proven technology.
- Europe allocates far more of its venture capital to climate than the US does. Around 15.6% of European VC went to climate tech in 2026 against 2.2% in the US.
- Vertical farming collapsed as a category. AeroFarms, Bowery and Plenty all filed for bankruptcy protection within 24 months, which says something useful about capital intensity and unit economics.
- Battery and energy storage now absorbs the most capital of any climate subsector, ahead of EVs, hydrogen and alternative proteins combined.
- Climate fintech has become its own category, covering carbon accounting, credit ratings, green lending and emissions data, and it tends to reach profitability faster than hardware.
- Software costs considerably less to scale than a factory, which is part of why the software-heavy companies on this list look sturdier than the hardware-heavy ones did.
Environmental startups attract a decent amount of public attention due to their missions. Their products often call for some sort of technology, whether that is to facilitate the rest of their work or whether the technology is their primary offering.
Either way, there is a lot to be learned from them, especially if you are in an industry like fintech, where you need to rely on a good reputation and public trust, much like environmental startups.
Let’s cover ten environmental startups that appear to be genuinely working in 2026, with funding figures where they are public, including:
- Climeworks
- Form Energy
- Redwood Materials
- Fervo Energy
- Brimstone
- Heirloom
- Rondo Energy
- Watershed
- Sylvera
- Skeleton Technologies
We’ll also look at what happened to the last generation, because the failures turn out to be more instructive than the successes.
At Trio, we provide experienced software developers rapidly, so you can scale your startup without needing to invest in long-term talent or an extensive sourcing period. Our developers have proven themselves through several years in production environments, including heavily regulated fields like fintech.
Where the money actually goes
Funding into climate tech startups reached $40.5 billion in 2025, up 8% from 2024, according to Sightline Climate. But there is a lot more to the situation than just that number.
For example, regional allocation diverges a lot.
Climate tech took roughly 15.6% of European venture capital in 2026 against a 3.8% global benchmark, while the US sat at 2.2% and China at 4.4%.
This indicates that European investors treat climate as a core category in a way American investors mostly do not, which shapes where companies choose to incorporate and raise.
Capital also concentrates heavily by subsector.
Battery and energy storage accounts for roughly $11 billion in cumulative funding, more than electric vehicles, green hydrogen and alternative proteins combined. Within carbon removal, the top ten companies hold about 65% of disclosed funding.
All of this tells you where investors think the technology risk has been retired.
10 environmental startups worth watching
Let’s look at the top 10 environmental startups we think are worth watching right now.
1. Climeworks
Climeworks runs direct air capture, pulling CO2 out of ambient air and storing it underground. Nearly $800 million raised makes it one of the best-funded climate companies anywhere.
What distinguishes it from a crowded field of companies with impressive renderings is the fact that it has kept building, testing, and selling carbon removal through successive hardware generations.
Direct air capture is still very expensive per tonne, and most reasonable people disagree about whether the cost curve will bend far enough.
Climeworks has at least been running real plants while that argument continues.
2. Form Energy
Form Energy builds 100-hour iron-air batteries for grid storage, a different problem from the four-hour lithium systems that dominate the market.
Long-duration storage is what makes a grid run on renewables through a still, cloudy week.
It raised a $405 million Series F, taking total funding past $1.2 billion.
One of its main selling points is that iron is abundant and cheap, which addresses the supply chain concentration that worries people about lithium.
3. Redwood Materials
Redwood recycles lithium-ion batteries and feeds the recovered materials back into domestic battery manufacturing, closing a loop that currently leaks badly.
The company raised $425 million in a Series E in January 2026, bringing Google in as an investor.
Timing definitely works in its favor here, since the first large cohort of EV batteries is reaching end of life now, which turns a theoretical feedstock into an actual one.
4. Fervo Energy
Fervo applies horizontal drilling and fracturing techniques borrowed from shale to geothermal, which historically only worked in a handful of geologically lucky places.
Making geothermal viable in more locations would give grids something renewables mostly lack: firm, always-on power.
We’ve also noticed that data center demand has made this considerably more commercially interesting than it was three years ago, and Fervo’s recent financing reflects that pattern too.
5. Brimstone
There is no denying that cement accounts for a large share of global industrial emissions, and the chemistry has resisted decarbonization because the CO2 comes from the limestone itself rather than just the heat.
Brimstone makes ordinary Portland cement from calcium silicate rock instead, a process that passively absorbs CO2 and yields a carbon-negative product.
They have over $200 million raised, with backing from cement incumbents alongside climate investors.
We have noted that incumbent participation is particularly important, since the product has to meet existing industry standards to sell at all.
6. Heirloom
Heirloom uses limestone to capture CO2 from air, accelerating a natural mineral process that would otherwise take years down to a few days. It raised $150 million in Series B funding co-led by Future Positive and Lowercarbon Capital.
The approach trades the energy intensity of Climeworks-style systems for a materials handling problem, which may scale differently. Which approach wins remains genuinely open.
7. Rondo Energy
Rondo stores renewable electricity as heat in brick, then releases it as industrial process heat.
Industrial heat is a large, awkward emissions category that electrification handles poorly, so a cheap thermal battery addresses a real gap.
The world’s largest 100 MWh heat battery has been running since October 2025 at a California fuel facility powered by off-grid solar, with more than 200 MWh of announced projects behind it.
8. Watershed
Watershed sits in climate tech rather than hardware, making it a great example of how other industries intersect with environmental startups.
The company is focused on helping companies measure their carbon footprint, set science-based targets, and buy removal.
Regulatory disclosure requirements across the EU and several US states have turned emissions accounting from a voluntary exercise into a reporting obligation, which created the market.
Software businesses in this space tend to reach sustainable economics far faster than companies building plants, a point worth holding onto when reading funding announcements.
9. Sylvera
Sylvera rates carbon credits, using satellite data and machine learning to assess whether projects actually deliver the removal they claim.
Investigations repeatedly finding that large shares of credits were worthless created obvious demand for independent assessment.
Ratings infrastructure tends to be the thing that makes a market function rather than the thing that makes headlines, which may explain why it gets less attention than it deserves.
10. Skeleton Technologies
Skeleton manufactures ultracapacitors with high energy and power density, used in buses, trains, and industrial equipment.
Unlike conventional batteries, ultracapacitors charge and discharge very quickly and involve fewer waste streams across their life.
They complement batteries rather than replacing them, handling the high-power bursts that degrade a battery when it gets asked to do that job repeatedly.
What the vertical farming collapse taught the sector
Unfortunately, like any other industry, we need to account for the environmental startups that failed, and vertical farming is the clearest case.
AeroFarms filed for Chapter 11 in June 2023. Bowery Farming, valued at $2.3 billion and backed by investors including GV, General Catalyst and Fidelity alongside celebrity money, ceased operations in November 2024 after raising over $647 million.
Plenty filed for Chapter 11 in March 2025. Infarm, Jungle and Future Crops wound down over a similar period.
One major reason for a lot of this is that capital expenditure for building and equipping farms ran very high.
For example, energy costs for LED lighting came in above projections, and labor accounted for somewhere between a quarter and a third of operating expenses despite heavy automation spending.
Climate fintech: where software meets emissions
Climate fintech sits somewhere between environmental technology and financial infrastructure, and has grown quickly.
Carbon accounting platforms like Watershed and Persefoni calculate corporate emissions across supply chains, which turns out to be a genuinely hard data engineering problem involving thousands of suppliers and inconsistent reporting.
Carbon credit infrastructure from Sylvera, Patch and Lune handles ratings, APIs and transaction rails for a market that needed both.
The most familiar is probably something like green banking from companies such as Atmos Financial, which directs deposits exclusively toward climate-positive lending.
Underneath all of this, the engineering required looks a lot like fintech, involving data pipelines, API integrations, audit trails, and regulatory reporting.
Emissions data increasingly has to withstand external assurance, which means immutable logging and traceability from source to disclosure, much the same requirements a financial audit imposes.
We have seen that overlap directly, with a lot of teams building carbon accounting or green lending products usually need engineers who have worked under financial reporting obligations, because the constraints rhyme even though the subject matter differs.
What environmental startups need from their engineering teams
Climate companies tend to be hardware-led, which creates a predictable gap, which means that most teams know electrochemistry or atmospheric science, and the software gets built by whoever is available.
That works until the software becomes the product, which can happen quite often.
Monitoring and verification systems, grid integration, customer-facing reporting, and the data infrastructure proving a tonne of carbon was actually removed all turn into engineering problems with real stakes attached.
For companies in this position, staff augmentation tends to fit better than permanent hiring, at least initially.
If you are building in this space and need engineers who can handle data integrity and reporting requirements, request a consult.
