McKinsey: Changing Capital for the Rise in Cleantech Clean technology finance is entering a phase where large-scale deployment and commercial discipline matter more than growth alone. According to McKinsey, the firm analysed more than 11,000 cleantech companies globally and found that investors now reward sustainable business models over expansion at any cost. Annual cleantech funding stabilised at US$70bn between 2023 and 2025, nearly four times the pre-2020 average. The key change goes beyond the amount of capital being raised to the way it is structured. Debt replaces venture capital Cleantech finance is moving from speculative venture capital to institutional debt. According to McKinsey, debt now makes up about 25% of post-boom funding, up from 10% in previous periods. This increase could show that lenders have greater confidence in the maturity of technology. Of the US$80bn in debt deployed since 2015, two-thirds was raised in the past three years. As technology models mature, financing is moving to support companies ready for large-scale deployment. Regional differences are emerging in how this capital is structured. In Europe, start-ups rely heavily on public funding, which accounts for 30% of venture capital, compared with 4% in the US. This reliance leaves European firms more vulnerable to changes in public policy and security priorities, which have reduced funding for sustainability, according to McKinsey. Europe faces scaling challenge "Our research suggests that Europe's challenge is now less about innovation and more about scaling," says Anna Granskog, Partner at McKinsey. "To compete globally, European scale-ups will likely need to combine public funding with greater access to private growth capital and strategic partnerships." "While capital deployment today is still skewed toward the US, the funds being raised are increasingly concentrated in Europe, which suggests there is investor appetite and the potential for greater clean-tech investment and deployment in the