Elemental x Sightline 2025 Market Sentiment Survey

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How are you really feeling about climate tech?

In a market still finding its footing post-ZIRP, mid-IRA and tariff uncertainty, climate tech fundraising remains a mixed bag. Deals are getting done — but valuations, timelines, and term sheets are all over the place. The headlines only tell part of the story.

That’s where you come in.

We’re running a short market sentiment survey to get a pulse check on what’s actually happening across the early-stage climate tech ecosystem. Whether you’re a founder on the raise or an investor deploying (or sitting on) capital, we want to hear from you.

We'll publish the anonymized results in an upcoming CTVC newsletter, so be on the lookout!

First things first: Are you a.... *

Founder/Startup

VC/Early-stage Investor

Private Equity/Growth Investor

Strategic/Corporate Investor

Foundation/philanthropic organization

Family office or impact investor

Government/Public Sector Representative

Project Finance/Infrastructure Investor

Commercial Banker

Other:

Market Sentiment & Landscape

1. What is your outlook on climate tech valuations for the remainder of 2025?

Most strong companies will successfully secure funding despite market challenges

Some strong companies will fail due to funding constraints, even with strong fundamentals

We'll see significant consolidation as stronger companies acquire struggling ones

Only companies with clear near-term profitability will be able to raise capital

Other:

Clear selection

2. Which stage of climate tech funding do you see as facing the biggest challenges in the next 12 months?

Pre-seed/Seed

Series A

Series B/C

Growth/Late stage

Project finance

Clear selection

3. What is your biggest concern for the climate tech ecosystem in 2025-2026?

Policy uncertainty (election impacts, IRA implementation, tariffs)

Macroeconomic factors (interest rates, recession)

Overvaluation/market correction

Technical risk of climate solutions

Commercialization challenges

Other:

Clear selection

4. Which climate tech sectors do you believe are most ripe for investment in 2025? (Select up to 3)

Clean energy (renewables, storage, grid modernization)

Carbon management (removal, capture, utilization)

Sustainable transportation

Water & waste solutions

Food & agriculture systems

Built environment & energy efficiency

Industrial decarbonization

Climate adaptation & resilience

Materials & circular economy

Other:

Scale Gap & Financing Mechanisms

5. Which projects do you anticipate will face the greatest financing challenge in 2025-2026?

Small distributed projects and facilities ($5-40M capital requirements)

Medium-scale facilities & deployments ($40-100M capital requirements)

Large infrastructure projects & large-scale deployments ($100M+ capital requirements)

Other:

Clear selection

6. At which development stages do you anticipate companies will face the greatest financing challenge in 2025-2026?

Pre-commercial R&D

Prototype & feasibility testing

Initial pilot deployment

First commercial-scale facility

Early commercial expansion (2-5 deployments)

Scaling to market leadership

Other:

Clear selection

7. Which financing mechanisms show the most promise for bridging the Scale Gap ($5-100M projects)? (Select up to 3)

Catalytic capital (grants, first-loss capital, concessionary investments)

Mission-aligned venture/growth equity

Project finance capital for early commercial deployments

Credit enhancements and risk mitigation tools

Flexible debt solutions (working capital, bridge loans, venture debt)

Asset-based financing (leasing, as-a-service models)

Tax equity and incentive monetization

Customer/offtaker financing

Other:

8. Where do you see the biggest financing gap in the current climate tech capital ecosystem?

Lack of catalytic first-loss capital to de-risk investments

Insufficient project finance for early commercial projects

Limited patient capital with appropriate risk/return expectations

Missing specialized underwriting expertise for climate technologies

Shortage of flexible growth capital for hardware companies

Underdeveloped markets for technology-specific financing solutions

Limited mechanisms to monetize climate benefits beyond carbon

Fragmented financing ecosystem requiring excessive coordination

Other:

Clear selection

9. What's your expectation for capital availability for First-of-a-Kind (FOAK) facilities across all sectors in 2025-2026?

Note: FOAK/EOAK facilities are commercial scale demonstrations of new technologies on the path to bankability and market adoption, typically requiring blended capital, corporate offtakes, and specialized project development expertise.

Significant increase

Moderate increase

Remain stable

Moderate decrease

Significant decrease

Clear selection

Policy & Political Environment

10. How are you adapting your investment strategy to the current political environment?

Focusing on "policy-proof" business models

Accelerating timelines to capture current tax credits and government incentives

Investing more outside of the U.S.

Engaging more actively in policy advocacy

Seeking greater private capital (VC/philanthropic) to offset policy uncertainty

No significant changes to strategy

Clear selection

11. Which policy development would most significantly impact your investment thesis or portfolio companies?

Changes to the IRA

Tariffs

Tax credits

Carbon pricing mechanisms

Permitting reform

Grid interconnection policies

Clear selection

12. How are you preparing portfolio companies for policy shifts after the 2024 election?

Accelerating project timelines to secure current current tax credits and government incentives

Creating financial models for worst-case policy scenarios (e.g., reduced/eliminated incentives)

Pursuing markets outside of the U.S.

Not making specific preparations

Other:

Clear selection

Investment Trends & Activity

13. How would you characterize your investment pace over the past 6 months (Nov.-April) compared to the 6 months prior?

Significantly faster

Somewhat faster

About the same

Somewhat slower

Significantly slower

Clear selection

14. If you've delayed or slowed investment pace, what is the primary reason?

Waiting for valuations to further decline

Prioritizing support for existing portfolio companies before making new investments

Uncertain macroeconomic environment

Less dry powder available in your fund

Fundraising challenges for your own fund

Not applicable - maintaining or increasing pace

Clear selection

15. How has your preferred check size changed in 2025?

Significantly larger

Somewhat larger

No change

Somewhat smaller

Significantly smaller

Clear selection

16. How has the emergence of AI influenced your climate tech investment thesis?

Significantly increased our focus on energy and infrastructure investments (ie for data centers)

Focused our investment activity at the intersection of AI and climate

Raised concerns about competing priorities for capital and resources

No significant impact on our climate investment approach

Other:

Clear selection

Portfolio Performance & Fundraising

17. How have terms and structures in climate tech deals evolved over the past 6 months?

Significant increase in structured terms (higher liquidation preferences, minimum returns) across all stages

Structured terms increasing primarily for later-stage deals

Founders accepting more equity dilution to secure funding

Shift toward non-dilutive capital and bridge rounds

Market finding balance between equity dilution and favorable terms for both sides

No significant change in deal structures or terms

Deals becoming more founder-friendly

Other:

Clear selection

18. Approximately what percentage of your portfolio companies have raised bridge or extension rounds in the past 12 months?

None

1-25%

26-50%

51-75%

76-100%

Clear selection

19. Approximately what percentage of your climate tech portfolio is currently fundraising or expects to fundraise in the next 6 months?

0-25%

26-50%

51-75%

76-100%

Clear selection

Role of Philanthropy

20. What role do you hope philanthropy will play in climate over the next 12 months?

Focus on technology and project implementation

Focus on leveraging private capital

Focus on policy and policy defense

Significantly increasing investment and engagement

Stepping back as uncertainty plays out

Remaining consistent with current levels of involvement

Other:

Clear selection

21. What's the most catalytic role philanthropy can play in climate technology commercialization in the next 12 months?

Providing loan guarantees

Offering development capital for early-stage technologies

Grants for technical assistance

Creating advanced market commitment funds

Supporting intermediaries that invest in startups

Providing catalytic finance for FOAK projects

Financing traditionally underfunded founders

Other:

Clear selection

22. Which industry should philanthropy focus on in the next 12 months?

Energy

Food & agriculture

Industry - Critical minerals

Industry - Building materials

Industry - Cement

Industry - Steel

Mobility - Aviation

Mobility - Shipping

Mobility - Ground Transportation

Carbon removal technology

Other:

Clear selection

Open-Ended & Final Reflections

23. What's one climate tech trend that you believe isn't getting enough attention but will be significant in the next 12 months?

24. What's your one-word or -phrase description of the climate tech investment landscape for 2025?

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