Corporate Venture Arms Emerge as Key Partners for Pioneering Climate Technology Projects

Corporate Venture Capital Fills Critical Gap in Climate Tech Funding

Corporate venture capital firms are increasingly positioning themselves as essential partners for first-of-a-kind climate technology projects facing massive capital requirements and technical hurdles, according to industry analysis. As traditional climate tech funding reportedly dropped 71% in Europe during the first half of 2025, CVCs claim they can provide the specialized expertise and customer connections that FOAK startups desperately need.

Corporate Venture Capital Fills Critical Gap in Climate Tech Funding
Technical Expertise and Risk Reduction
Securing Crucial Offtake Agreements
Potential Competitive Concerns

Technical Expertise and Risk Reduction

Sources indicate that CVCs offer distinct advantages for hardware-focused climate technology companies that might intimidate traditional venture investors. Analysts suggest these corporate-backed investors can leverage parent company resources to test materials and solutions in industrial settings that would be inaccessible to standalone VC firms.

“CVCs are sometimes more comfortable dealing with hardware-focused companies because they have the in-house expertise to test materials and make bets which would potentially scare off a lot of other investors,” Louis Fearn, investor at Jaguar Land Rover’s In Motion Ventures, stated in the report.

The analysis highlights how CVCs can connect founders with specialized technical experts within their corporate networks. David Delfassy, investment director at TDK Ventures, described how his firm helped a portfolio company overcome a critical reactor development challenge by tapping into TDK’s technical network. After recent trade policy changes, TDK reportedly also assisted companies with supply chain reassessment based on the corporation’s global sourcing experience.

Securing Crucial Offtake Agreements

Industry observers note that offtake agreements—contracts arranged before production—are particularly vital for FOAK climate tech companies seeking debt financing for factory construction. These agreements signal market validation to infrastructure funds and major banks, according to the analysis.

CVCs reportedly offer a unique advantage through their ability to facilitate offtake agreements with their corporate parents. “Strategics can play a very helpful role in that from being an off take partner and signing an LOI or an MOU, to being a development partner,” Fearn explained in the report.

Jaguar Land Rover has announced agreements with several InMotion portfolio companies, including a pilot with biomaterials startup Uncaged Innovations and a commercial partnership with sustainable transport firm Zeelo, according to company statements.

Potential Competitive Concerns

Despite these advantages, analysts suggest there are potential downsides to CVC involvement in FOAK climate tech ventures. Some founders reportedly worry that corporate affiliation could deter competitors from becoming customers, while others express concerns about being pressured to align product development with the corporate investor’s business priorities.

However, sources indicate that proper governance structures can mitigate these risks. Delfassy suggested that board representation needs careful structuring to avoid conflicts of interest, noting that “nowadays most investors understand that the value of a CVC far outweighs those potential risks.”

As climate tech battery manufacturers and next-generation energy projects face increasing capital intensity, the role of corporate venture capital appears set to expand, according to industry observers. The specialized expertise and market access these investors provide may become increasingly critical for pioneering technologies seeking commercialization.