Climate tech stumbles in cold investment climate

Investment by private equity (PE) and venture capital (VC) funds in the country's climate technology (tech) startups has seen a sharp fall, despite the big focus of the government on reducing carbon emissions and pushing for cleaner fuels.

- SURAJEET DAS GUPTA

The reason: There is a big gap between startup climate tech needs for long-term funding and what VCs find bankable.

According to data by research agency Tracxn, PE and VCs in 2023 put in substantial $1.66 billion in over 157 climate tech companies, with an average deal size of $10.57 million. But that number nosedived to $910 million in 2024, with the average deal size falling by half to an average of $5.5 million. And in 2025 to date, PE/VCs have put in a mere $270 million in the first six months of the year, but in only 37 companies—a third of what they did in the last year.