Regional Startup Index Shows Investment Uptick in Deep-Tech and Climate Sectors
SAN FRANCISCO, October 28, 2025 — The 2025 North American Startup Ecosystem Index released today reveals a decisive investment shift toward deep technology and climate sectors, with capital flows to these categories reaching their highest combined share in five years even as overall venture funding remains measured.
Deep technology ventures captured 33 percent of total North American venture capital in 2024, translating to $76 billion in funding, according to the Dealroom Global Tech Ecosystem Index. This represents the second-most active investment year for deep tech, with funding levels down just 13 percent from the 2021 peak compared to a 62 percent decline for the broader technology sector. Hardware-focused startups specializing in robotics, quantum computing, and advanced manufacturing automation saw particular strength, with Deep Tech & Robotics ranking as the top sector attracting VC interest at 6.7 percent of all allocations in Q2 2025.
The climate technology sector demonstrated even more pronounced growth. According to analysis from Net Zero Insights released during New York Climate Week, U.S. climate tech funding reached $15.3 billion in the first half of 2025, a 34 percent increase from $11.4 billion during the same period in 2024. The surge was driven by equity deals concentrated in later-stage companies, with Series C and later rounds jumping 33.3 percent year-over-year as investors targeted technology-ready enterprises. The data shows capital increasingly flowing to industrial decarbonization and manufacturing solutions, which captured 19.3 percent of total climate funding in 2025—double their 2020 share. Energy generation and infrastructure maintained its leadership position at 33.2 percent of investments, fueled by AI-driven power demand and grid modernization initiatives.
A notable emerging sub-sector is nature-based technology and climate risk management, which leapt to 13.3 percent of total funding after holding steady at approximately 5.5 percent for four consecutive years. This category encompasses water treatment systems, ecosystem management platforms, disaster risk assessment tools, and environmental monitoring solutions. The geographic distribution of investments also shifted, with nearly 60 percent of U.S.-based climate tech investors participating in overseas venture deals during the first half of 2025—the highest level on record and a sharp reversal from the post-Inflation Reduction Act trend that favored domestic deployment.
The investment patterns reflect a maturing ecosystem comfortable with longer development cycles and higher capital requirements. While early-stage activity showed resilience with seed and Series A rounds comprising three-quarters of climate tech deal volume, there was a notable contraction in initial funding. Seed deals declined 12.8 percent and Series A rounds dropped 12 percent year-over-year, even as Series B investments increased 26.8 percent. This bifurcation suggests investors are becoming more selective at the entry level while doubling down on proven technologies approaching commercial scale.
“These numbers validate what we’re seeing on the ground: investors are no longer treating deep tech and climate solutions as experimental bets,” said Dr. Sarah Chen, Chief Executive Officer of Horizon Analytics, the research consortium behind the index. “The convergence of AI workloads demanding stable power, supply chain reshoring requiring advanced manufacturing, and measurable climate impacts creating clear ROI has transformed these sectors into core portfolio must-haves rather than impact sidelines.”
The Regional Startup Index, published annually by Horizon Analytics, benchmarks innovation ecosystems across 127 metropolitan areas using metrics including venture flows, patent activity, talent retention, and corporate partnership density. The 2025 report incorporates data from over 4,200 funding rounds, 1,800 deep tech startups, and 950 climate technology ventures across North America.
About Horizon Analytics
Horizon Analytics is an independent research consortium specializing in technology ecosystem benchmarking and innovation economy forecasting. Founded in 2019, the firm provides data intelligence to venture capital firms, economic development agencies, and Fortune 500 corporate strategy teams. Its Regional Startup Index is recognized as the authoritative source for tracking emergent technology investment patterns across North American metropolitan areas.
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