Welcome to 2026 - a pivotal year for green transition momentum and European technological sovereignty!
The green transition tech landscape in Europe has undergone a remarkable transformation during the year 2025. As we enter 2026, we're witnessing not just a recovery, but a fundamental restructuring of how capital flows into solutions that strengthen Europe's energy independence and industrial competitiveness.
According to recent market data, European green transition and energy tech funding rebounded strongly in 2025. While overall funding remains below 2021 peaks, the quality of deals and focus on unit economics has strengthened considerably. European climate tech companies have raised a total of $5.3b (€4.5b) in private equity since the beginning of 2025, excluding debt and grants. That's a roughly 40% drop in funding from the same time last year. However, Deal recovery isn't Europe's biggest problem, though — it's VC firm fundraising. Through Q3 2025, European VC firms raised a mere €8.3 billion ($9.7 billion).
What's particularly encouraging is the shift in sectoral allocation. Industrial solutions - historically underfunded relative to their emissions impact - are gaining traction. According to an OECD report, global CleanTech investment peaked at around €74 billion in 2021, and by 2025, nearly 30% of green startups secured funding, almost double the rate of their non-green peers. This reflects a growing recognition that the hardest-to-abate sectors require immediate digital transformation to maintain European industrial leadership.
The convergence of resilience priorities, critical infrastructure protection, and green transition has created unprecedented opportunities. As geopolitical tensions persist and energy security remains paramount, European companies are investing in solutions that deliver energy independence, competitive advantage, and emissions reduction. This triple mandate has become the new normal for green transition startups, with European sovereignty at its core, as outlined in the EU's Clean Industrial Deal.
Welcome to 2026 - a pivotal year for green transition momentum and European technological sovereignty!
The green transition tech landscape in Europe has undergone a remarkable transformation during the year 2025. As we enter 2026, we're witnessing not just a recovery, but a fundamental restructuring of how capital flows into solutions that strengthen Europe's energy independence and industrial competitiveness.
According to recent market data, European green transition and energy tech funding rebounded strongly in 2025. While overall funding remains below 2021 peaks, the quality of deals and focus on unit economics has strengthened considerably. European climate tech companies have raised a total of $5.3b (€4.5b) in private equity since the beginning of 2025, excluding debt and grants. That's a roughly 40% drop in funding from the same time last year. However, Deal recovery isn't Europe's biggest problem, though — it's VC firm fundraising. Through Q3 2025, European VC firms raised a mere €8.3 billion ($9.7 billion).
What's particularly encouraging is the shift in sectoral allocation. Industrial solutions - historically underfunded relative to their emissions impact - are gaining traction. According to an OECD report, global CleanTech investment peaked at around €74 billion in 2021, and by 2025, nearly 30% of green startups secured funding, almost double the rate of their non-green peers. This reflects a growing recognition that the hardest-to-abate sectors require immediate digital transformation to maintain European industrial leadership.
The convergence of resilience priorities, critical infrastructure protection, and green transition has created unprecedented opportunities. As geopolitical tensions persist and energy security remains paramount, European companies are investing in solutions that deliver energy independence, competitive advantage, and emissions reduction. This triple mandate has become the new normal for green transition startups, with European sovereignty at its core, as outlined in the EU's Clean Industrial Deal.
The AI revolution has made green computing a critical priority for European digital sovereignty. According to the International Energy Agency (IEA), data centres are responsible for about 1.5%, or 415 Terawatt-Hours (TWh), of the world's total yearly electricity consumption. This has grown by 12% per year over the last 5 years and projections indicate that it is on course to more than double towards 945 TWh by 2030. We're seeing breakthrough solutions in liquid cooling, AI-driven server utilization, and edge computing that reduce energy consumption by up to 50%. Software optimization platforms that analyze and reduce computational waste are becoming essential as companies balance AI ambitions with sustainability commitments.
While in the US the increasing energy demand is largely driven by the increase in AI, and hence data centers and computing, industrial electrification is driving the energy demand in the rest of the world. This adds more emphasis for the optimization and calls for digital solutions. Digital twins have moved from pilot projects to production scale, securing Europe's manufacturing competitiveness. Leading manufacturers are using AI-driven process optimization to reduce emissions by 30-40% without major capital expenditure. The key breakthrough has been the ability to model complex industrial processes with sufficient accuracy to enable real-time optimization. We're particularly excited about solutions that combine process efficiency with predictive maintenance, delivering both sustainability and operational resilience for critical industrial infrastructure. We are actively scanning startups in this area.
The circular economy has graduated from concept to implementation, reducing Europe's dependence on critical raw material imports. The aim is to have 24% of materials circular by 2030. B2B marketplaces for industrial byproducts are processing significant transactions, while AI-powered waste sorting and material recovery facilities are achieving unprecedented efficiency. The integration of blockchain for materials passporting is creating transparency that enables true circularity at industrial scale. Digital product passports mandated by EU regulation are driving adoption across supply chains, strengthening European resource sovereignty.
Our portfolio’s circular economy startup Renow is growing rapidly and expanding multiple new countries within this year. Renow provides an AI-powered recommerce platform that automates the entire returns process for e-commerce merchants - from remote inspection and quality grading to instant resale through local logistics networks, turning costly returns into profitable opportunities.
Beyond individual EVs, the focus has shifted to system-level optimization supporting European transport autonomy. Fleet management platforms now orchestrate charging, routing, and vehicle utilization to minimize both costs and emissions. The integration of autonomous vehicles into these systems is creating new possibilities for shared mobility. AR/VR technologies are reducing the need for physical transportation through immersive remote collaboration, while AI optimizes multimodal journey planning for minimal carbon impact.
While the eMobility sector has been a less active focus for many VCs for the past few years, the actual market dynamics are much more ripe for scaling these days. From the digitalization perspective, the mobility sector is rapidly evolving with innovative solutions for electrifying transportation infrastructure, optimizing fleet operations, and integrating EVs with the energy ecosystem. Hence, we believe that this is exactly the right time to invest again in the early stage startups.
Our three portfolio companies that are addressing multiple aspects of this space. Flexecharge provides vendor-agnostic load and energy management software for EV charging infrastructure. Their platform enables charge point operators to reduce grid fees by up to 70% through dynamic load balancing and renewable energy integration. ZeroMission offers a comprehensive fleet electrification platform providing real-time visibility across vehicles, charging stations, and operations. Synergi orchestrates sustainable mobility by connecting EVs, home energy assets, and the grid through smart software, with 15,000+ households saving up to 50% on EV charging costs. Together, these companies represent a comprehensive ecosystem approach: Flexecharge optimizing infrastructure, ZeroMission managing fleet operations, and Synergi bridging consumers and the energy system to accelerate zero-emission transportation.
The explosion of distributed energy resources has created complexity that only AI can manage effectively. Recent research confirms that data centres will be a major contributor to increasing power demand. In Europe, ICIS estimates that their share of electricity demand will grow from 3% to 4.5% in 2030 and 5.7% in 2035. Virtual power plants are becoming mainstream, with software orchestrating millions of assets from heat pumps to EV batteries, strengthening Europe's energy autonomy. The integration of real-time carbon accounting into energy decisions is transforming how businesses approach their net-zero commitments while reducing dependence on energy imports.
Our portfolio company LiveEO is rapidly advancing this space.LiveEO provides AI-powered satellite analytics for infrastructure monitoring, helping companies detect risks like vegetation encroachment and ground movement along assets, power lines, railways, and pipelines. Further, the satellite AI capabilities of course lends itself to a highly valuable contribution to the dual use sector.
As physical climate impacts accelerate, protecting critical infrastructure has become a European security priority. Recent Zurich research, which analysed over 25,000 energy generation and storage facilities across major European countries, demonstrated that renewable assets, which are set to become increasingly crucial to the region's low-carbon future, are highly vulnerable to these extreme weather events. 83% of operating renewable capacity and 92% of storage assets are at high-risk. Solutions range from AI-powered monitoring of energy grids, transport networks, and water systems to predictive analytics for infrastructure resilience.
Our portfolio company Repath provides AI-powered climate intelligence software that helps energy and infrastructure companies assess and manage physical climate risks at the asset level, enabling them to build resilience against extreme weather events and changing climate conditions.
The construction and building sector is undergoing a significant digital transformation as Europe's 220 million buildings, 85% of which were built before 2001, require urgent modernization to meet climate targets. According to the European Commission's Renovation Wave Strategy, the market faces immense pressure to at least double the annual energy renovation rate by 2030, targeting 35 million building renovations and a 60% reduction in buildings' greenhouse gas emissions. With the construction industry responsible for approximately 40% of global emissions and industrial procurement representing hundreds of billions in annual spending across Europe, the sector presents substantial opportunities for digital solutions that can streamline operations, reduce waste, and accelerate the path to net-zero buildings by 2050. The construction sector is a rather cyclical business environment, so the timing is a critical element in addressing this particular market. We foresee that the sector may be getting ready for the growth spurt in the next few years, which makes it attractive for early stage investment opportunities right now.
Our portfolio addresses critical pain points across the construction value chain through two innovative companies. Lumoview revolutionizes building digitization with its patented technology that captures comprehensive 3D spatial and thermal data in just 2 seconds per room, automatically processing it into BIM-ready models, thermal analyses, and renovation plans—reducing traditional surveying time by over 95% and providing the essential data foundation for Europe's massive building renovation wave. Cronvall transforms the fragmented industrial procurement landscape through its AI-powered platform that connects over 8,000 construction and industrial buyers to 150+ verified suppliers, providing real-time pricing transparency, automated ordering, and intelligent supply chain orchestration that eliminates costly delays and reduces procurement errors.
The biodiversity crisis has catalyzed innovation at the intersection of nature and technology. Satellite monitoring combined with AI enables real-time tracking of ecosystem health, while blockchain-based nature credits create new financing mechanisms for conservation. Carbon removal technologies, particularly biochar and enhanced weathering, are scaling rapidly with digital MRV (Monitoring, Reporting, and Verification) systems ensuring quality and permanence.
Our portfolio company Supercritical operates a carbon removal marketplace that enables companies to achieve net zero by providing access to vetted, high-quality carbon dioxide removal credits from technologies like biochar, direct air capture, and enhanced weathering, serving as a critical bridge between corporate buyers and innovative carbon removal suppliers.
The integration of sustainability into core financial infrastructure has accelerated dramatically, supporting European capital markets sovereignty. Real-time ESG data platforms, automated impact reporting, and AI-driven green bond verification are becoming standard. Over €100 billion will be mobilised by the Clean Industrial Deal to support EU-made clean manufacturing. The emergence of transition finance - funding for high-emitting companies to decarbonize - has created demand for sophisticated monitoring and verification systems.
Our portfolio company Sustashift provides comprehensive CSRD compliance software that automates the complex process of sustainability reporting, including digital tagging that reduces manual work from 500 hours to just five seconds, tailored audit templates, and pre-made model documents covering all regulatory requirements. For the companies going through their transition and strategy implementation processes, Keto Software provides strategic portfolio management capabilities.
The green transition is no longer a niche sector - it's the foundation of Europe's economic sovereignty and competitiveness. As we progress through 2026, we see three key drivers accelerating adoption:
First, global trends indicate that tailwinds continue to strengthen. Global energy investment is set to rise in 2025 to USD 3.3 trillion, a 2% rise in real terms on 2024. Around USD 2.2 trillion is going collectively to renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification, twice as much as the USD 1.1 trillion going to oil, natural gas and coal.
Second, it's not just good for the world, but very much a core business for the corporations making more money and saving costs via energy efficiency, resource efficiency and circular economy. Green is about acting smart. The business case for green transition and energy tech has never been clearer. Our portfolio companies consistently demonstrate that sustainability, resilience, and profitability are complementary objectives that strengthen European technological independence.
Third, talent concentration in green transition rivals any previous technology wave. The mission-driven nature of the sector, combined with the imperative to secure Europe's energy and industrial future, attracts the best minds from AI, software engineering, and domain expertise.
At Greencode, we remain committed to backing digital-first solutions that can scale rapidly, deliver measurable impact, and contribute to European strategic autonomy. The combination of technological maturity, market readiness, regulatory support, and geopolitical urgency creates an unprecedented opportunity for transformative startups.
Are you building a digital-first green transition solution with European or global ambitions? We'd love to hear from you! Submit your deck for consideration at hello@greencode.vc
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