The climate technology sector is at an inflection point, and the window for seed-stage investment in foundational climate solutions has never been more consequential. The combination of rapidly declining technology costs across key enabling platforms, unprecedented regulatory and policy support in major markets, and an expanding corporate buyer base for climate solutions is creating conditions that closely parallel the early internet era in terms of the magnitude of value that is about to be created. Having spent the last five years investing exclusively in climate tech at the seed stage, I want to share where we see the most significant opportunities, what we look for in climate tech founders, and where Sway for Future is focused for the next 18 months.
The Macro Context: Why Now Is Different
It is worth beginning with the macro picture, because the current moment in climate tech is genuinely unlike any previous period. Three converging dynamics are reshaping the investment landscape in ways that create extraordinary opportunities for seed-stage investors.
First, the cost curves for foundational climate technologies have reached or are approaching inflection points that make large-scale commercial deployment economically viable for the first time. Solar photovoltaic costs have declined by over 90% in the past decade. Lithium-ion battery costs have fallen by 97% since 1991. Electrolysis costs for green hydrogen are declining rapidly as manufacturing scale increases. And the AI infrastructure buildout is beginning to accelerate cost declines in software-intensive climate applications - from climate risk modeling to grid optimization to precision agriculture - in the same way it has transformed software costs across every other sector.
Second, the policy environment in major markets has shifted dramatically in favor of climate technology deployment. The US Inflation Reduction Act represents $369 billion in direct climate and clean energy investment - the largest single piece of climate legislation in human history. The European Union's Green Deal and Fit for 55 package are creating mandatory compliance frameworks that generate corporate demand for climate technology products across dozens of sectors. The UK, Canada, Australia, and many emerging markets are following suit with their own climate investment frameworks. This policy support does not just subsidize individual companies - it creates the market infrastructure that enables entire categories of climate technology to achieve commercial viability.
Third, the corporate buyer base for climate solutions has expanded and matured significantly over the past three years. In 2020, corporate sustainability commitments were largely voluntary, rarely specific, and rarely backed by meaningful procurement budgets. By 2025, the combination of SEC climate disclosure requirements, mandatory European Scope 3 reporting frameworks, and genuine competitive pressure around sustainability performance has transformed corporate climate procurement from a nice-to-have to a business imperative. This means that climate tech startups are selling into a market that has genuine, contract-backed commercial demand - not just pilot programs and proof-of-concept engagements.
Where We Are Most Excited: Carbon Removal
Of all the sub-sectors within climate technology, carbon removal is where we see the most compelling combination of near-term commercial opportunity and long-term impact potential. The scientific consensus is now clear: even in the most aggressive emissions reduction scenarios, humanity will need to remove significant quantities of previously emitted CO2 from the atmosphere to limit warming to 1.5 or 2 degrees Celsius. This creates a massive commercial opportunity for companies developing scalable, cost-effective carbon removal technologies.
Our investment in TerraBlue is representative of our thesis in this space. TerraBlue has developed a novel electrochemical direct air capture process that achieves significantly lower energy intensity than conventional thermal approaches. At scale, their process has the potential to capture CO2 at costs below $100 per ton - a threshold that would make direct air capture commercially viable across multiple voluntary and compliance market applications. The Section 45Q tax credit, which currently values permanent carbon storage at $180 per ton, provides a substantial near-term revenue floor while the company scales toward cost parity.
Beyond direct air capture, we are actively evaluating opportunities in enhanced weathering, biomass with carbon capture and storage, soil carbon sequestration, and novel ocean-based carbon removal approaches. Each of these pathways has distinct risk profiles, technology readiness levels, and measurement and verification challenges. Our diligence framework in carbon removal focuses heavily on the quality of measurement, reporting, and verification infrastructure, because in a market where buyers are paying for carbon outcomes, the credibility of the measurement system is as important as the underlying technology.
Climate Risk and Adaptation
While most climate tech investment attention focuses on mitigation - reducing emissions - we believe adaptation technologies represent an equally large and underinvested commercial opportunity. Physical climate risks are already materializing faster than most models predicted even five years ago, and the financial exposure embedded in global asset portfolios, insurance books, and infrastructure networks is enormous and largely unquantified.
Our investment in ClimateAI reflects our conviction that climate risk modeling and analytics represent one of the most defensible enterprise software opportunities in the market. Financial institutions, insurance companies, real estate investors, and large corporations with significant fixed asset bases need sophisticated, location-specific climate risk models to make informed investment and risk management decisions. The data requirements, modeling sophistication, and domain expertise required to build a genuinely useful climate risk platform create a meaningful barrier to entry that protects well-positioned players.
We are also closely watching opportunities in climate-resilient infrastructure, agricultural adaptation, water security, and coastal resilience. These sectors share a common characteristic: they are large, mostly government or quasi-government funded markets where technology-driven solutions can significantly reduce costs and improve outcomes. Companies that can navigate complex procurement processes and build trusted relationships with government counterparties have the potential to build remarkably durable, recurring revenue businesses.
Clean Energy Infrastructure and Software
The energy transition is fundamentally a software and optimization problem as much as it is a hardware problem. As the electricity grid incorporates more variable renewable generation, energy storage, electric vehicles, and distributed energy resources, the complexity of grid management increases exponentially. This creates massive demand for software tools that can optimize generation dispatch, manage demand response, coordinate storage assets, and handle the bilateral complexity of a grid with millions of small producers as well as large-scale generation.
SolarGrid, our community solar platform investment, is an example of a company capturing value in the clean energy infrastructure space through a pure software and marketplace model. Rather than owning solar assets, SolarGrid connects community solar operators with residential and commercial subscribers, managing the subscription logistics, billing, and regulatory compliance that have historically limited the reach of community solar programs. Their asset-light model generates high-margin, recurring revenue at a fraction of the capital intensity of asset-owning energy businesses.
We are actively evaluating opportunities in grid software, virtual power plant platforms, energy storage optimization, and distributed resource management systems. The common thread we look for is defensible data advantages - companies whose software becomes more valuable as more assets, users, and transactions flow through their platform, creating network effects that are difficult for incumbents or new entrants to replicate.
Sustainable Agriculture and Food Systems
Agriculture and food systems account for approximately 24% of global greenhouse gas emissions, consume 70% of global freshwater withdrawals, and are the primary driver of biodiversity loss worldwide. Transforming these systems to operate sustainably while feeding a growing global population is one of the defining technological challenges of the next 30 years - and one of the largest commercial opportunities in climate technology.
Our investment in AgriSense reflects our view that precision agriculture technology represents an immediate and significant commercial opportunity, particularly for smallholder farmers who have historically lacked access to the data and decision-support tools available to large-scale commercial operations. AgriSense's IoT sensor and AI platform enables farmers to optimize inputs based on real-time soil and crop data, reducing water, fertilizer, and pesticide use by 30-40% while maintaining or improving yields. At scale, this technology can reduce agricultural emissions and input costs simultaneously - a rare combination of environmental and financial benefit.
VerdantFoods, our precision fermentation investment, addresses a different but equally significant aspect of the food system challenge. Conventional animal protein production is extraordinarily resource-intensive, requiring vast areas of land, enormous quantities of water and feed, and generating significant greenhouse gas emissions from enteric fermentation and manure management. Precision fermentation - using engineered microorganisms to produce proteins, fats, and other food ingredients - can produce functionally equivalent products at a fraction of the environmental footprint. The key near-term challenge is cost parity with conventional production, and VerdantFoods's proprietary strain development and fermentation process optimization is targeting that threshold on an ambitious timeline.
What We Look For in Climate Tech Founders
After five years of investing specifically in climate technology at the seed stage, we have developed a clear view of the characteristics that separate the founders most likely to build transformative, fundable companies from those who are passionate about the problem but unlikely to navigate the specific challenges of the climate tech commercialization pathway.
First and most important, we look for genuine technical depth. Climate technology is rarely a pure software business. Most of our investable opportunities involve novel chemistry, materials science, biology, or engineering approaches. We want founders who are not just capable of commissioning technical development, but who have a deep, intuitive understanding of the underlying science and engineering. This technical depth is essential for navigating the inevitable challenges that arise during scale-up, and it creates the kind of credibility with potential customers, partners, and follow-on investors that is difficult to fake.
Second, we look for founders who have thought carefully about the full commercialization pathway, not just the technology. Climate tech companies face unique commercialization challenges: long customer sales cycles, complex regulatory approval processes, infrastructure dependencies, and financial structures that often require creative blending of venture capital, project finance, and government support. Founders who have mapped this pathway in detail, who understand the milestones that matter to follow-on investors, and who have begun building the relationships they will need to navigate these challenges are far more likely to succeed than technically excellent founders who have not thought carefully about the business.
Third, we look for founders who are genuinely committed to impact as a business strategy, not just a marketing narrative. The best climate tech companies are those where the impact and the business model are inseparable - where the company cannot be commercially successful without also being impactful. This alignment is what creates the founder resilience, talent advantage, and customer loyalty that distinguish the best climate tech companies from their competitors.
Our Investment Outlook for 2026
As we look ahead to 2026, we are focused on three areas where we believe the combination of technology maturity, market timing, and policy support creates compelling seed investment opportunities. Carbon removal, particularly novel biogenic and electrochemical approaches, remains our highest-priority investment focus. Climate risk analytics and adaptation software is a close second. And we are increasingly excited about water technology - treatment, conservation, and reallocation - as water scarcity emerges as one of the most acute near-term climate adaptation challenges in North America, Europe, and high-growth emerging markets.
If you are a founder building in any of these areas, we want to hear from you. We invest $2M to $5M at the seed stage, we take board seats and work intensively with our portfolio companies, and we bring a network of corporate partners, government relationships, and technical advisors that is specifically designed to accelerate the commercialization pathway for climate technology companies. Reach out at invest@swayforfuture.com. The work of building the solutions to climate change is the most important work being done anywhere in the world today, and we consider it a privilege to partner with the founders who are doing it.