Climate tech companies raised some $19.6 billion in funding during the third quarter of this year, which was a 7.6% decline on the previous quarter, according to new data from Net Zero Insights.
At the same time, however, equity investment increased – up 17% quarter-on-quarter and around 26% compared with Q3 2025 – as investors continued to back companies across every stage of development, it noted. Equity funding totalled $15.8 billion in the period.
Deal volume
The number of deals in the climate tech sector also declined in the third quarter, with 686 transactions recorded during the period – the lowest quarterly total since 2021. Equity funding was therefore concentrated across a smaller number of deals.
Series B investment represented the strongest area of growth, with funding at the stage increased 50% quarter-on-quarter to $3.6bn, reversing weakness seen during 2025 and the first part of 2026.
‘That matters for companies that need that round to move from pilot to first commercial deployment,’ Net Zero Insights noted.
The firm power sector – i.e. electricity generation that is guaranteed to be available 100% of the time – was a major investment theme during the quarter, with fusion, fission, geothermal and storage companies collectively raising around $6.3 billion across 17 rounds.
Three firms, Commonwealth Fusion Systems, Valar Atomics and Base Power, each secured rounds of $1 billion.
Regional funding
On a regional basis, meanwhile, the United States attracted the largest share of equity funding, with $8.8 billion raised across 184 deals, representing a 36% increase from the previous quarter.
The UK followed with $1.5 billion, an increase of 74%, while China recorded $1.4 billion, down 18% on the previous quarter.
Elsewhere, there were 78 exits, compared with 99 in the second quarter, with mergers and acquisitions accounting for around 78% of activity. Initial public offerings and SPAC transactions remained limited.
The full State of Climate Tech Q3 2026 report can be found here.
