Why Investors Are Souring on This Once Red-Hot Climate Tech
Venture funding in US-based direct air capture startups dropped by more than 60% in the first quarter.
Climeworks’ Mammoth carbon removal plant in Hellisheioi, Iceland.
Photographer: Heida Helgadottir/BloombergAs political winds shift in the US and big corporations pull back on their climate ambition, investors, too, are giving the cold shoulder to a nascent technology that will be vital to tackling climate change.
US-based startups developing direct air capture (DAC) — machines that suck planet-warming carbon dioxide straight out of the air — received about $58 million from venture capitalists in the first three months of 2025, a more than 60% decline from a year ago, according to market research firm Pitchbook. The dip stands in contrast to the overall US climate tech sector, which saw a nearly 65% increase in investment during the same period.