Nuclear and storage top venture capital energy picks

The 2026 edition of the Energy Startup Radar has a new name that reflects this year’s expanded analysis. The new name is the Next-Generation Energy Startup Radar, instead of the Clean Energy Startup Radar, which allows us to cover more funding types and startups. Our fourth annual report is based on an analysis of early-stage investment data from Crunchbase. As always, the report seeks to identify trends, promising technologies, and new business models in the energy space that are of interest to venture capital investors.

Venture capital investment in future energy startups in 2025 reflected a new direction in the transition to low-carbon energy. A swell of energy-intensive data centers to support artificial intelligence adoption and greater industrial electrification has resulted in a remarkable step change in electricity demand over the last couple of years. Data for 2025 show a clear move toward technologies to meet rising electricity demand, increase system flexibility, or provide low-carbon baseload power.

Global venture capital investment in energy startups declined in 2025 after the rebound of the prior year, but the market did not return to 2020 levels, when investment was significantly lower than the years that followed. Oliver Wyman's analysis shows funding fell 16% year over year to $24.5 billion, down from $29.1 billion in 2024. That brings investment broadly back to its 2021 level, while still leaving the market around 3.5 times larger than in 2020.

The decline marks a normalization of capital flows rather than a structural retreat from future energy investment. Funding has now remained below the $33.4 billion peak of 2022 for three consecutive years, suggesting the sector has moved out of the post-2020 acceleration phase into a more selective capital-allocation environment. Investors continue to deploy meaningful capital, but with a higher bar for scale-up quality, commercialization pathways, unit economics, and resilience without exceptional grant support.

Green energy grants fall as private capital becomes more selective

A major driver of the 2025 reset was the decline in grant-driven funding, especially in the United States. According to Oliver Wyman's analysis, public grants to future energy startups fell from $5.54 billion in 2024 to $1.83 billion in 2025. That’s a $3.71 billion reduction and a large share of the overall $4.6 billion decline in global funding. In the US alone, grants declined from $4.2 billion to $800 million.

The policy change is central to the 2025 developments because the sector did not lose access to capital in general. Instead, exceptional public-funding spikes faded, while private investors became more selective.

The main market driver in 2025 was the changing relationship between energy transition investment and electricity consumption. The expansion in the number of data centers and the scaling of AI are contributing to a spike in electricity demand.

At the same time, industrial electrification, including shifts from fossil-fuel combustion to electricity in manufacturing processes and increasing reliance on electric transportation, continues to drive up power consumption. This creates demand for technologies that can either supply reliable, low-carbon power or make the power system more flexible, such as nuclear power, battery storage, and grid solutions.

Why investors are backing nuclear and battery technologies 

The number of funding rounds fell 24% year over year to 1,285, while the average funding amount per round increased from $17.2 million in 2024 to $19.1 million in 2025. The funding decline was therefore volume-led rather than ticket-led. Capital retreated from broad deployment and moved toward fewer, larger rounds backing companies with stronger, perceived market priority.

Category performance shows how sharply investor preferences shifted. Energy services and management solutions remained the largest category, holding broadly stable at $6.9 billion in 2025 versus 2024. Battery technology and storage solutions regained momentum, up 10% year over year to $6 billion. It rose to the second-largest category, supported by transactions such as Eelpower’s $675 million funding round and Group14 Technologies’ $463 million series D. Energy from nuclear technologies delivered the strongest growth, rising 66% to $5 billion.

Investors prioritize reliable power over broader climate bets

Together, these categories point to a clear turn toward technologies that help meet rising electricity demand, increase system flexibility, or provide low-carbon power. Battery and storage companies benefited from the need to balance grids, integrate renewable generation, and increase optional value in markets with high volatility.

Nuclear funding was supported by rising investor conviction that reliable low-carbon baseload power will be needed as electrification, data centers, and AI increase demand. Investment in nuclear includes companies developing both fusion and innovative fission technologies, such as small modular reactors (SMRs). Capital remains available, but it is being deployed to a narrower set of high-conviction themes.

While nuclear energy’s low-carbon appeal benefited, VC investment in other low-carbon fuels and gases fell 77% to $1.4 billion, while carbon capture, utilization, and storage (CCUS) declined 67% to $800 million. But a couple maintained a following: John Cockerill Hydrogen’s $135 million round stood out among low-carbon fuels, while Chestnut Carbon and Terra CO2 Technologies were among the larger CCUS transactions.

Renewable technology and tools attracted $3.1 billion in investment, down 22% year over year, with sizable investments still going to startups like Holosolis in France, which is developing a solar manufacturing facility, and Sunwafe in Spain, which is building a silicon wafer plant.

Grid products for power companies rose to $800 million, supported by deals such as Amperesand, which develops solid-state transformer technology, and Infravision, which uses aerial robotics to construct and repair transmission grids. Carbon analytics and accounting tools and services declined to $500 million.

North America leads funding with a rapid rise in power demand from data centers

Regional patterns also became more differentiated. North America remained the dominant funding region and proved comparatively resilient. Despite a $1.1 billion decline in investment to $14.3 billion, the region’s share of global funding increased from about 53% in 2024 to about 59% in 2025, underscoring the comparative weakness elsewhere.

Europe saw a sharp contraction, falling to $5.9 billion from $7.9 billion, while Asia Pacific declined to $4.2 billion from $5.6 billion. Investment in the rest of the world remained small at approximately $100 million.

North America’s resilience masks two opposing forces. While the region, especially the US, experienced most of the global contraction in grants, a rapid rise in electricity demand prompted investment in energy startups. Large private rounds offset part of the grant contraction to widen North America’s lead: Examples include distributed battery storage provider Base Power and nuclear developers such as the commercial fusion company Commonwealth Fusion Systems, the advanced SMR provider X-energy, and advanced nuclear technology group TerraPower.

What is behind energy investment trends in Europe and Asia-Pacific 

Europe and the Asia Pacific followed a different path, with continued emphasis on renewables, battery storage, and grid flexibility. Energy services and management remained a cross-regional investment pillar.

In Europe, energy startup funding declined for a second year, down 25%. The United Kingdom became Europe’s leading funding market, declining only 9% year over year to $1.6 billion and increasing its share of European funding. UK strength was supported by battery and storage activity, such as grid-scale battery company Eelpower.

Germany and France lost momentum after their prior strength, although Germany continued to show interest in nuclear fusion by investing in companies such as Proxima Fusion. Spain was the main positive outlier as far as growth in Europe. Otherwise, the European market remained concentrated, with the United Kingdom, Germany, France, and Sweden accounting for about 70% of investment in 2025.

Market discipline raises bar for energy transition investment

The 2025 data point to a more disciplined market rather than a market in retreat. Funding levels remain far above the 2020 baseline, average round sizes have returned to prior peak levels, and large transactions remain possible for companies aligned with urgent system needs. The outlook for future energy startups is cautious but not negative.

What may persist moving forward is the higher bar for investment: fewer rounds, greater deal concentration, and more emphasis on commercial maturity. What may normalize is the reliance on broad-based funding momentum and exceptional grant-driven spikes.

Low-carbon fuels, CCUS, and other long-horizon technologies may still play important roles in the energy transition, but their funding trajectory will likely depend on clearer economics, stronger demand signals, and more bankable commercialization pathways. By contrast, technologies tied directly to rising electricity demand, grid flexibility, and low-carbon power appear better positioned to sustain investor attention. The broad adoption of AI and the accompanying rise in electricity demand, along with the continued electrification of industry and transportation, will continue to drive growth in energy startups.