While startup investment has been climbing lately, not all industries are partaking in the gains.

Cleantech is one of the spaces that’s been mostly left out. Overall funding to the space is down this year, despite some pockets of bullishness in areas like fusion and battery recycling.

The broad trend: Cleantech- and sustainability-related startup investment has been on a downward trajectory for several years now. And so far, 2025 is on track to be another down year.

On the bright side, however, there’s been some pickup in recent months, boosted by big rounds for companies in energy storage, fusion and other cleantech subsectors.

The numbers: Investors put an estimated $20 billion into seed- through growth-stage funding to companies in cleantech, EV and sustainability-related categories so far this year.

That puts 2025 funding on track to come in well below last year’s levels, which were already at a multiyear low.

Still, quarter by quarter, the pattern looks more encouraging. Investment hit a low point in Q1 of this year and recovered some in the subsequent two quarters. The current quarter is also off to a strong start.

Noteworthy recent rounds

The largest cleantech-related round of the year closed this month. Base Power, a provider of residential battery backup systems and electricity plans, raised $1 billion in Series C funding. The Austin, Texas-based company says its systems allow energy providers to more efficiently harness renewable power.

The second-largest round was Commonwealth Fusion Systems’ $863 million Series B2 financing. The Devens, Massachusetts-based company says it is moving closer to being the first in the world to commercialize fusion power.

For a bigger-picture view, below we put together a list of 10 of the year’s largest cleantech- and sustainability-related financings.

The broad takeaway: Startups innovating for an era of rising power consumption

Not to over-generalize, but if there was one big takeaway from recent cleantech and sustainability startup funding, it would be that founders and investors recognize that these are times of ever-escalating energy demand. They’re planning accordingly, looking to tap new sources of power, fusion in particular, as well as better utilize and scale existing clean energy sources.

Related Crunchbase query and list:

• Cleantech, EV & Sustainability-Related Funding, 2025 YTD
• Large 2025 Financings For Cleantech, EV And Sustainability Startups

Illustration: Dom Guzman

Correctly calling a market peak is a notoriously tricky endeavor.

Case in point: When tech stocks and startup funding hit their last cyclical peak four years ago, few knew it was the optimal time to cease new deals and cash in liquidatable holdings.

This time around, quite a few market watchers are wondering if the tech stock and AI boom has reached bubble territory. And, as we explored in Friday’s column, there are plenty of similarities between current conditions and the 2021 peak.

Even so, by other measures we’re also in starkly different territory. The current boom is far more concentrated in AI and a handful of hot companies. The exit environment is also much quieter. And of course, the macro conditions don’t resemble 2021, which had the combined economic effects of the COVID pandemic and historically low interest rates.

Below, we look at four of the top reasons why this time is different.

No. 1: Funding is largely going into AI, while other areas aren’t seeing a boom

Four years ago, funding to most venture-backed sectors was sharply on the rise. That’s not the case this time around. While AI megarounds accumulate, funding to startups in myriad other sectors continues to languish.

Biotech is on track to capture the smallest percentage of U.S. venture investment on record this year. Cleantech investment looks poised to hit a multiyear low. And consumer products startups also remain out of vogue, alongside quite a few other sectors that once attracted big venture checks.

The emergence of AI haves and non-AI have-nots means that if we do see a correction, it could be limited in scope. Sectors that haven’t seen a boom by definition won’t see a post-boom crash. (Though further declines are possible.)

No. 2: The IPO market is not on fire

The new offering market was on fire in 2020 and 2021, with traditional IPOs, direct listings and SPAC mergers all flooding exchanges with new ticker symbols to track.

In recent quarters, by contrast, the IPO market has been alive, but not especially lively. We’ve seen a few large offerings, with CoreWeave, Figma and Circle among the standouts.

But overall, numbers are way down.

In 2021, there were hundreds of U.S. seed or venture-backed companies that debuted on NYSE or Nasdaq, per Crunchbase data. This year, there have been less than 50.

Meanwhile, the most prominent unicorns of the AI era, like OpenAI and Anthropic, remain private companies with no buzz about an imminent IPO. As such, they don’t see the day-to-day fluctuations typical of public companies. Any drop in valuation, if it happens, could play out slowly and quietly.

No. 3: Funding is concentrated among fewer companies

That brings us to our next point: In addition to spreading their largesse across fewer sectors, startup investors are also backing fewer companies.

This year, the percentage of startup funding going to megarounds of $100 million or more reached an all-time high in the U.S. and came close to a record global level. A single deal, OpenAI’s $40 billion March financing, accounted for roughly a quarter of  U.S. megaround funding.

At the same time, fewer startup financings are getting done. This past quarter, for instance, reported deal count hit the lowest level in years, even as investment rose.

No. 4: ZIRP era is long gone

The last peak occurred amid an unusual financial backdrop, with economies beginning to emerge from the depths of the COVID pandemic and ultra-low interest rates contributing to investors shouldering more risk in pursuit of returns.

This time around, the macro environment is in a far different place, with “a “low fire, low hire” U.S. job market, AI disrupting or poised to disrupt a wide array of industries and occupations, a weaker dollar and a long list of other unusual drivers.

What both periods share in common, however, is the inexorable climb of big tech valuations, which brings us to our final thought.

Actually, maybe the similarities do exceed differences

While the argument that this time it’s different is a familiar one, the usual plot lines do tend to repeat themselves. Valuations overshoot, and they come down. And then the cycle repeats.

We may not have reached the top of the current cycle. But it’s certainly looking a lot closer to peak than trough.

Related Crunchbase query:

• Rounds Raised By Startups Using AI

Related reading:

• The Great ‘AI Bubble’ Debate
• The Last Market Boom Ended 4 Years Ago. Here’s How Current Conditions Look Similar
• Biotech Share Of US Funding Hits Lowest Point In Crunchbase History
• Cleantech On Track For Weak Funding Year
• A Record Share Of Startup Funding Is Going To $100M+ Rounds
• SoftBank And OpenAI Make History With Largest Startup Financing Ever

Illustration: Dom Guzman

Want to keep track of the largest startup funding deals in 2025 with our curated list of $100 million-plus venture deals to U.S.-based companies? Check out The Crunchbase Megadeals Board.

This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

This was another active week for large startup financings. AI data center developer Crusoe Energy Systems led with $1.38 billion in fresh financing, and several other megarounds were AI-focused startups. Other standouts hailed from a diverse array of sectors, including battery recycling, biotech and even fire suppression.

1. Crusoe Energy Systems, $1.38B, AI data centers: Crusoe Energy Systems, a developer of AI data centers and infrastructure, raised $1.38 billion in a financing led by Valor Equity Partners and Mubadala Capital. The deal sets a $10 billion+ valuation for the Denver-based company.

2. Avride, $375M, autonomous vehicles: Avride, a developer of technology to power autonomous vehicles and delivery robots, announced that it secured commitments of up to $375 million backed by Uber and Nebius Group. The 8-year-old, Austin, Texas-based company said it plans to launch its first robotaxi service on Uber’s platform in Dallas this year.

3. Redwood Materials, $350M, battery recycling: Battery recycling company Redwood Materials closed a $350 million Series E round led by Eclipse Ventures with participation from new investors including Nvidia’s NVentures. Founded in 2017, the Carson City, Nevada-based company has raised over $2 billion in known equity funding to date.

4. Uniphore, $260M, agentic AI: Uniphore, developer of an AI platform for businesses to deploy agentic AI, closed on $260 million in a Series F round that included backing from Nvidia, AMD, Snowflake Ventures and Databricks Ventures. The round sets a $2.5 billion valuation for the Palo Alto, California-based company.

5. Sesame, $250M, voice AI and smart glasses: San Francisco-based Sesame, a developer of conversational AI technology and smart glasses, picked up $250 million in a Series B round led by Sequoia Capital. The startup is headed by former Oculus CEO and co-founder Brendan Iribe.

6. OpenEvidence, $200M, AI for medicine: OpenEvidence, developer of an AI tool for medical professionals that has been nicknamed the “ChatGPT for doctors” reportedly raised $200 million in a GV-led round at a $6 billion valuation. Three months earlier, OpenEvidence pulled in $210 million at a $3.5 billion valuation.

7. Electra Therapeutics, $183M, biotech: Electra Therapeutics, a developer of therapies against novel targets for diseases in immunology and cancer, secured $183 million in a Series C round. Nextech Invest and EQT Life Sciences led the financing for the South San Francisco, California-based company.

8. LangChain, $125M, AI agents: LangChain, developer of a platform for engineering AI agents, picked up $125 million in fresh funding at a $1.25 billion valuation. IVP led the financing for the 3-year-old, San Francisco-based company.

9. ShopMy, $70M, brand marketing: New York-based ShopMy, a platform that connects brands and influencers, landed $70 million in a funding round led by Avenir. The financing sets a $1.5 billion valuation for the 5-year-old company.

10. Seneca, $60M, fire suppression: Seneca, a startup developing a fire suppression system that includes autonomous drones that help spot and put out fires, launched publicly with $60 million in initial funding. Caffeinated Capital and Convective Capital led the financing for the San Francisco-based company.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the period of Oct. 18-24. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Illustration: Dom Guzman

Nearly four years ago, the market hit a cyclical peak under conditions that in many ways look quite similar to what we’re seeing today.

Sky-high public tech valuations. Booming startup investment. Sharply rising valuations. And, a few cracks emerging on the new offering front.

Sure, there are quite a few differences in the investment environment, which we’ll explore in a follow-on piece. For this first installment, however, we are focusing on the commonalities, with an eye to the four highlighted above.

No. 1: Sky-high public tech valuations

First, both then and now, tech stocks hit unprecedented highs.

In mid-November 2021, the tech-heavy Nasdaq Composite index hit an all-time peak above 16,000. Gains stemmed largely from sharply rising tech share prices.

Today, the Nasdaq is hovering not far below a new all-time high of over 23,000. The five most valuable tech companies have a collective market cap of more than $16 trillion. Other hot companies, like AMD, Palantir Technologies and Broadcom have soared to record heights this year.

While private startups don’t see day-to-day valuation gyrations like publicly traded companies, their investors do take cues from public markets. When public-market bullishness subsides, private up rounds tend to diminish as well.

No. 2: Booming startup investment

In late 2021, just like today, venture investment was going strong.

Last time, admittedly, it was much stronger. Global startup funding shattered all records in 2021, with more than $640 billion invested. That was nearly double year-earlier levels. Funding surged to a broad swathe of startup sectors, with fintech in particular leading the gains.

For the first three quarters of this year, by contrast, global investment totaled a more modest $303 billion. However, that’s still on track for the highest tally in years. The core driver is, of course, voracious investor appetite for AI leaders, evidenced by OpenAI’s record-setting $40 billion financing in March.

The pace of unicorn creation is also picking up, which brings us to our next similarity.

No. 3: Up rounds and sharply rising valuations

At the last market peak, valuations for hot startups soared, driven in large part by heated competition among startup investors to get into pre-IPO rounds.

This time around, we’re also seeing sought-after startups raising follow-on rounds in quick succession, commonly at sharply escalated valuations. Per Crunchbase data, dozens of companies have scaled from Series A to Series C within just a couple of years, including several that took less than 12 months.

We’re also seeing prominent unicorns raising follow-on rounds at a rapid pace this year. Standouts include generative AI giants as well as hot startups in vertical AI, cybersecurity and defense tech.

No. 4: A few cracks emerging

During the 2021 market peak, even when the overall investment climate was buzzier than ever, we did see some worrisome developments and areas of declining valuations.

For that period, one of the earlier indicators was share-price deterioration for many of the initial companies to go public via SPAC. By late 2021, it had become clear that there were numerous “truly terrible performers” among the cohort, including well-known names such as WeWork, Metromile and Buzzfeed.

This time around, the new offerings market hasn’t been quite so active. But among those that did go public in recent months, performance has been decidedly mixed. Shares of Figma, one of the hottest IPOs in some time, are down more than 60% from the peak.

Online banking provider Chime and stablecoin platform Circle have shown similar declines.

At this point, these are still generously valued companies by many metrics. But it’s also worth noting the share price direction in recent months has been downward, not upward.

Next: Watch for more cracks

Looking ahead, one of the more reliable techniques to determine whether we are approaching peak or already past is to look for more cracks in the investment picture. Are GenAI hotshots struggling to secure financing at desired valuations? Is the IPO pipeline still sluggish? Are public tech stocks no longer cresting ever-higher heights?

Cracks can take some time to emerge, but inevitably, they do.

Related reading:

• Global Venture Funding And Unicorn Creation In 2021 Shattered All Records 
• Q1 Global Startup Funding Posts Strongest Quarter Since Q2 2022 With A Third Going To Massive OpenAI Deal  
• Highest Count Of New Unicorns Join Crunchbase Board In Over 3 Years As Exits Also Gain Steam
• These Are The Speediest Companies To Go From Series A To Series C
• Truly Terrible Performers Multiply Among Startups Taking SPAC Route To Market

Illustration: Dom Guzman