Climate Tech Funding Hits a 4-Year Low: Who Gets the Top Equity Deals in Q3?

Global climate tech funding and deals hit a 4-year low in Q3 2024, per CB Insights’ State of Climate Tech Report. The decline in financial backing comes despite growing urgency around climate action and the push to commercialize technologies that can help mitigate climate change.

As seen below, the funding for the quarter totaled only $4.8 billion, the lowest since 2020. The same goes for the number of deals, which reached only 461 in the said quarter.

Here are the other key climate tech trends we uncovered from the report.

Regional Disparities in Funding Trends

While global funding has dropped, the US and Europe have managed to grow median deal sizes due to government support. Both regions continue to advance climate tech through substantial grants, loans, and other funding mechanisms. These have somewhat offset the broader slowdown in venture capital (VC) interest. 

On the other hand, China has taken a different approach: government subsidies for clean energy have been reduced this year, contributing to a cooling of investor enthusiasm in the climate sector. This shift is particularly notable, as China had previously been a significant player in cleantech innovation and adoption.

A Focus on Early-Stage Innovations

Across major economies, government funds are increasingly flowing into early-stage climate tech ventures, particularly those nearing commercialization. In the US, significant federal support has been directed toward advanced technologies such as nuclear fusion and direct air capture (DAC) of carbon dioxide, both of which promise groundbreaking ways to reduce greenhouse gas emissions at scale. 

The US Department of Energy has led in funding these emerging technologies, recognizing their potential for long-term impact on global climate targets.

Why Climate Tech Funding is Declining

This funding slowdown reflects multiple challenges. Investors face high interest rates and economic uncertainties, which have impacted the willingness to fund high-risk projects typical in climate tech. 

Additionally, some tech investors are refocusing on sectors with quicker returns. The reduction in VC enthusiasm, particularly in markets like China, has also been tied to shifting political and regulatory priorities, which in turn affects international investor confidence.

• RELATED: The Top 4 Venture Capital Climate Companies: How Are They Shaping the Green Future?

In response to these challenges, governments in the US, Europe, and other regions are providing targeted funding to keep innovation in climate tech moving forward. By supporting early-stage technologies through grants and loan programs, governments are working to ensure that promising but capital-intensive projects, such as fusion energy and DAC, have a chance to mature and reach commercial viability.

The emphasis on early-stage innovation signals a shift toward investing in technologies that, though not yet ready for widespread deployment, hold the potential for transformative impact on emissions reduction and energy transition efforts.

According to the CB Insights Report, here are the top three equity deals in Q3 and what these companies are doing in the sector. 

Fourth Partner Energy: Leading India’s Solar Revolution

Location: India

Round Amount: $275 Million

Fourth Partner Energy is a trailblazer in India’s renewable energy sector, focusing on delivering sustainable, solar-based power solutions to businesses. Founded in 2010, the company has installed over 700 MW of solar capacity, positioning itself as one of India’s top solar energy providers.

The company operates across 20+ states in India, with a diverse portfolio that spans rooftop, ground-mount, and utility-scale solar installations. Fourth Partner Energy has successfully executed more than 1,000 projects, with over 600 clients from various sectors, including manufacturing, retail, and education.

Through innovative financing models, the company has helped clients reduce their energy bills by up to 40%, while also contributing to India’s green energy goals. With an ongoing commitment to sustainability, the company plans to reach 2 GW of installed capacity by 2025.

Below are the climate tech company’s major milestones at a glance:

Key Initiatives:

• 700 MW of installed solar capacity
• Goal to reach 2 GW of installed capacity by 2025
• Achieving 40% energy savings for clients on average

With its innovative approach and growing portfolio, Fourth Partner Energy is set to be a significant force in India’s renewable energy future.

Altana AI: Revolutionizing Supply Chains with Artificial Intelligence

Location: United States

Round Amount: $200 Million

Altana AI is transforming global supply chains by leveraging artificial intelligence to drive efficiency, sustainability, and transparency. Founded in 2018, the company’s AI-driven platform helps businesses map, analyze, and optimize supply chain operations with a focus on minimizing environmental impact and reducing waste.

The climate tech company’s platform uses advanced machine learning and big data to provide real-time insights into supply chain networks, identifying inefficiencies and enabling smarter decision-making.

Here’s a glimpse of its dashboard:

Altana AI serves industries ranging from manufacturing to retail, providing tools that help companies track carbon footprints, manage risks, and enhance sustainability efforts.

By using AI, the company empowers organizations to reduce emissions, cut costs, and achieve better supply chain resilience.

Key Highlights:

• Raised over $250 million in funding
• Serves global Fortune 500 companies in multiple industries
• Helps reduce carbon emissions by 20% on average across supply chains
• Provides real-time data insights and predictive analytics for supply chain optimization

Altana AI’s cutting-edge approach to AI-powered supply chain optimization is enabling businesses to make smarter, more sustainable decisions. With an eye on the future, the company continues to lead the charge in using technology to create a greener, more efficient global economy.

Twelve: Transforming CO2 into a Resource for the Future

Location: United States

Round Amount: $200 Million

Twelve is at the forefront of the fight against climate change by transforming carbon dioxide (CO2) into valuable products through its revolutionary technology. Launched in 2020, the company is developing a groundbreaking process that captures CO2 and converts it into clean, sustainable products like chemicals, fuels, and building materials, which can help industries reduce their carbon emissions and reliance on fossil fuels.

• SEE MORE: Twelve Transforms Carbon into Sunglasses, Car Parts, and Fuel

Twelve’s carbon transformation technology uses renewable energy to turn CO2 into useful commodities at scale, with the potential to reduce millions of tons of CO2 annually. The company’s efforts align with global net-zero targets that enable industries to meet their climate goals while maintaining economic growth.

Twelve’s innovative approach has garnered significant attention, raising over $330 million in funding from leading investors and forming partnerships with top corporations committed to a carbon-free future.

Major Achievements:

• $330 million raised in funding to date
• Partnership with BMW and Microsoft to scale CO2-to-product technology
• Potential to reduce millions of tons of CO2 annually
• Focused on delivering a net-zero emissions future

As the company continues to scale its operations, Twelve is playing a key role in advancing a circular economy and enabling industries to decarbonize at an unprecedented scale.

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