For the first time in years, early stage climate investment is contracting while growth stage investing expanded.
Seed funding fell 20% in 2025.
Series A dropped 7%, but deal counts fell 22%, pushing average sizes back to 2021 levels.
Meanwhile, Growth investment jumped 78%.
This isn’t a capital shortage. It’s market maturation.
The Sightline data shows what’s happening:
Early-stage investors carried climate tech through the post-2022 correction. Now growth stage investors are doing the “heavy” lifting.
What we see repeatedly, at Encito Advisors, is capital concentrating around 5-10 emerging category leaders per sector. Companies with proven tech, viable business models, and credible platform deployment paths close mega-rounds. Everyone else struggles to close even modest raises.
The question isn’t whether capital exists for early-stage ventures. As always, but increasingly so, it’s whether your venture is one of the investable few in a saturated category.
In this cycle Climate investment has entered its consolidation era.
Encito Advisors LLP
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