What is cleantech and why does it attract so much venture capital?

Las cleantech combines frontier science, industrial innovation, and scalable business modelsto deliver solutions that provide both climate impact and economic viability.

Unlike the broader concept of environmentally friendly technologies, cleantech carries an additional investment dimension: these companies are capable of deploying solutions at industrial scale while attracting significant capital.

In other words, it is not enough to develop clean energy solutions. They must also be competitive, replicable, and capable of generating financial returns.

This explains why cleantech is attracting growing attention from investors, institutions such as the European Investment Fund, and networks including Invest Europe.

The pillars and technologies discussed below define the cleantech sector and are fundamental to guiding both investment decisions and sustainability policies.

As evidence of its strategic importance, the European Commission reports that NextGenerationEU allocates more than €250 billion to climate-related initiatives—approximately 37% of its total budget—supporting the transition toward net-zero emissions.

This capital mobilization, financed largely through green bonds until 2026, represents the largest financial engine currently driving cleantech scale-up across Europe and is intended to establish the technological foundations needed to achieve climate neutrality by 2050.

The Decarbonization,, la resource efficiency, and circularity have become central evaluation criteria for venture capital investors assessing both impact potential and market opportunity.

• Decarbonizationfocuses on measurable reductions in CO₂ emissions through renewable energy deployment and the electrification of transportation. It is supported by regulatory frameworks such as the EU Emissions Trading System (EU ETS) and the (European Green Deal).
• Resource efficiencyseeks to maximize output while minimizing the consumption of water, energy, and raw materials. It also tends to demonstrate resilience during periods of economic uncertainty. Examples include AI-driven electricity grid optimization and liquid immersion cooling technologies.
• Circularity is based on transforming waste into valuable resources within closed-loop systems. One representative example is biomethane—a renewable gas produced from agricultural waste, manure, and sludge—which can be upgraded and injected into existing natural gas networks.

Investment capital is increasingly moving away from basic energy generation toward deep tech solutions capable of solving industrial bottlenecks.

Today, investors primarily focus on two dimensions that encompass the five technologies attracting the strongest investment momentum:

• Critical infrastructure: advanced solar technologies, next-generation energy storage, green hydrogen.
• Systemic efficiency: precision agritech, carbon capture and utilization (CCU).

The investment thesis behind cleantech is driven by three structural forces that extend far beyond ESG considerations:

• Economic competitiveness versus fossil-fuel alternatives
• Regulatory certainty
• Access to global-scale markets

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Sustainability is no longer viewed as a premium feature or luxury. Falling costs in renewable energy generation and energy storagehave dramatically reduced the so-called "Green Premium." In sectors such as solar power, wind energy, and batteries, it has effectively disappeared.

The Levelized Cost of Energy (LCOE) for solar and wind power is now lower than that of many fossil-fuel alternatives, while the price of lithium-ion batteries has fallen by more than 80% over the past decade, according to an annual analysis by BloombergNEF.

As a result, venture capital is no longer investing in cleantech primarily for environmental reasons—it is investing because these businesses are increasingly competitive. For investors, cleantech offers two compelling advantages: expanding margins and a Total Addressable Market (TAM) measured in trillions of euros, often exceeding the growth potential of mature technology sectors.

An regulatory environment has become a major risk-reduction mechanism for investors. Initiatives such as NextGenerationEU and national clean energy plans provide long-term demand visibility for cleantech solutions.

At the same time, institutions such as the European Investment Fund act as powerful catalysts by co-investing in venture capital funds focused on commercially viable clean technologies.

This dynamic is reinforced by sovereign wealth funds and pension funds, whose ESG commitments increasingly channel substantial pools of capital toward green investment strategies.

European climate-tech unicorns have demonstrated that climate markets can generate returns comparable to those of high-growth software companies.

Companies such as Northvolt and Climeworks have become emblematic examples of cleantech's ability to scale internationally and attract significant funding. However, these same cases also reveal how challenging the sector can be. While they initially raised capital at extraordinary speed, they subsequently highlighted the reality that scaling capital-intensive climate technologies is slower, more expensive, and often riskier than many investors anticipated during the post-Green Deal boom.

As a result, the green investment surge has cooled. According to data published by Cleantech for Europe, venture and growth-stage cleantech investment in the European Union declined by €8.2 billion in 2025, marking the second consecutive annual decline since 2023.

The Northvolt case illustrates this shift particularly well. After securing the largest debt financing package ever raised by a European cleantech scale-up—$5 billion in January 2024—the company experienced severe financial difficulties less than a year later, ultimately carrying approximately $15 billion in liabilities.

This process sparked a debate—highlighted in a análisis de Bruegel analysis on the role of the European Investment Bank (EIB) and other public institutions—regarding the limitations of traditional venture capital in financing heavy industrial infrastructure. In fact, the European Parliament has submitted an official parliamentary question regarding the EIB’s financial exposure to Northvolt.

The underlying systemic problem that led to the company’s collapse is also addressed by the International Energy Agency (IES) in its Dealroom, report The State of Energy Innovation 2025, which provides a global macroeconomic analysis explaining why it happened.

In this regard, it is not surprising that many funds are turning to blended finance, among other approaches, to mitigate these industrial risks.

The Iberian Peninsula has established several specialized hubs that combine industrial heritage with sustainable innovation, positioning Spain as a strategic European center for deep tech startups .

This maturity is reflected in clear regional specialization:

• Valencia y Málaga: leaders in agritech and water-efficiency technologies.
• Basque Country and Asturias: strongholds of industrial decarbonization and green hydrogen initiatives.
• Madrid y Barcelona: home to approximately 60% of venture capital activity and the majority of specialized investment funds.

In 2025, Spain invested €16 per capita in cleantech according to Cleantech for Europe . While this demonstrates strong activity, it remains below Germany (€24) and France (€22), and significantly below leaders such as Finland (€115) and Sweden (€94).

This phenomenon reflects what is often described as the European cleantech funding gap, highlighting the difficulty many companies face in securing late-stage growth capital.

Spain ranked fourth in the European Union by number of completed cleantech deals during the third quarter of 2025, demonstrating that the ecosystem is active but still relatively underfunded compared to leading markets.

The bottleneck increasingly appears in the transition from First-of-a-Kind (FOAK) projects to full-scale commercialization—the critical bridge between laboratory validation and industrial deployment.

To address this challenge, according to the Dealroom, Cleantech for Iberia (2026) estimates that Spain and Portugal must mobilize up to €50 billion in additional public and private investment annually to achieve their 2030 decarbonization targets.

Success stories such as Submer which develops liquid cooling solutions for data centers, and Recover, a leader in circular fashion technologies, demonstrate that the Iberian ecosystem is producing companies with genuine international traction.

Many high-potential scientific projects remain trapped in laboratories because they lack a business structure that investors can understand.

This challenge is commonly referred to as the technological valley of death—the critical gap that prevents scientific breakthroughs from becoming scalable startups.

For researchers, the journey from TRL 3–4 to venture-backed companies operating at TRL 6–7 is often the most difficult stage. During this phase, venture capital is typically absent, making public funding sources such as CDTI, Horizon Europe, and impact-focused funds essential. Understanding this technology maturity ladder is critical to protecting intellectual property while progressing toward commercialization.

As noted earlier, the sector's primary challenge lies in scaling. Spain will need at least €4 billion in additional venture capital investment by 2030 to match its European peers.

According to Bianca Dragomir, Director of Cleantech for Iberia, capital is available; the challenge lies in matching financial instruments to the risk profile of cleantech companies during scale-up. As that adjustment takes place, investment is increasingly flowing toward new opportunity areas.

In 2026, some of the most attractive cleantech segments for investors include: climate adaptation and water resilience technologies, cooling technologies for AI data centers, parametric climate insurance, and resilient agriculture solutions.

Meanwhile, the European Union is actively debating the role of nuclear energy and the deployment of Small Modular Reactors (SMRs) as part of its long-term energy strategy.

The regulatory framework is also evolving through initiatives such as:

• Net-Zero Industry Act: aimed at relocating clean technology manufacturing to Europe.
• Critical Raw Materials Act: designed to reduce dependence on external suppliers of strategic materials such as lithium and rare earths.

In this increasingly demanding environment, the winners will be those companies and research institutions capable of taking technologies from the laboratory to the market while meeting the expectations of investors who are looking for robust metrics—not just compelling narratives.

That is precisely where Bolboreta Investiga,comes in. If you are developing a cleantech innovation and need support transforming it from scientific research into a scalable business opportunity, we can help you structure your business model, validate its investment potential, and access the funding needed to grow. Contact our deep tech transfer specialists and take the next step toward commercialization.