Over the last fifteen years, I have watched climate tech move through multiple cycles of optimism, overcorrection, and recalibration. Each wave brought new capital, new founders, and new narratives about what would scale fastest. For a long time, software was the answer. It was capital efficient, scalable, and aligned with venture expectations.
That is no longer true in the same way.
The next wave of climate tech winners will look far less like traditional software companies and far more like infrastructure companies.
More specifically, this shift is happening across energy and infrastructure systems, where software alone is no longer enough.
We are already seeing this shift play out through our conversations with investors and seed-stage companies, where expectations are sharpening and planning for Q3 and Q4 is increasingly focused on execution, not narrative.
Why Software Alone Is Not Winning in Energy and Infrastructure
There is still a tendency, particularly at the early stage, to believe that a better dashboard, better analytics, or a more elegant abstraction layer will drive adoption. In most parts of energy and infrastructure systems, particularly across the grid, that is simply not enough.
The buyers are not startups. They are utilities, regulators, infrastructure operators, and large industrial players. They are slow-moving by necessity, risk-averse by design, and accountable to systems that cannot fail.
This introduces realities that many software-first founders underestimate:
- Sales cycles are long and multi-stakeholder
- Buyers are regulated and politically exposed
- Capital deployment decisions are scrutinized at multiple levels
- Proof of value must be demonstrated in real-world environments
The result is that credibility, engineering depth, and deployment success matter far more than speed alone.
If you cannot show how your product performs inside an actual system, under real constraints, with measurable outcomes, you are not competing.
We are seeing this directly in conversations with both investors and operators. Companies that can show a completed study, a deployed workflow, or a measurable reduction in planning timelines are being taken far more seriously than those still positioning around future capability. The gap between what is promised and what is operational is becoming one of the clearest filters in the market.
Infrastructure Thinking Is Now a Requirement
What we are seeing across the highest quality companies is a shift from product thinking to system thinking.
The companies gaining traction are not just building tools. They are embedding themselves into workflows, shaping how decisions are made, and ultimately becoming part of the infrastructure layer.
That requires a different posture:
- You are influencing operational decisions, not just selling features
- You are aligning with regulatory and operational timelines
- You are optimizing for long-term adoption and expansion
This is where many early-stage companies building in energy and infrastructure are still misaligned. They are building like SaaS companies while selling into infrastructure environments.
What Investors Are Looking for in Energy and Infrastructure in Q3 and Q4
As we move into Q3 and Q4, we expect to see a clear separation in the market.
Investors focused on energy and infrastructure systems are increasingly prioritizing:
- Which companies can convert pilots into production
- Which teams understand regulated buyers
- Which products can move from proof of concept to repeatable revenue
We are also seeing later-stage investors re-engage earlier in the lifecycle, not to fund growth, but to assess which companies have a credible path to production. This is reshaping how early-stage companies are evaluated well before they reach traditional inflection points.
The expectation is no longer just growth. It is proof of durability.
For founders building in energy and infrastructure, this creates both pressure and opportunity.
The pressure is obvious. You need to demonstrate real-world traction sooner.
The opportunity is that if you can show credible deployment, even at small scale, you can unlock a level of investor interest that was previously reserved for later-stage companies.
London Climate Action Week and Global Market Shifts
London Climate Action Week, taking place June 23 through June 29, will be a key signal for where this shift is heading globally.
Historically, this event has been heavy on policy, capital formation, and high-level narratives. This year, we expect a much stronger emphasis on execution.
The conversations will move toward:
- What is actually being deployed
- Where capital is flowing with conviction
- Which companies are bridging the gap between innovation and infrastructure
We will be there and hosting a founder and investor event focused specifically on these themes, bringing together operators and capital partners who are actively working through what this next phase requires.
We also expect to see a continued shift from UK and EU-based companies and investors looking more seriously at US market entry.
The reason is straightforward.
The US market, despite its complexity, offers:
- Larger contract sizes
- More aggressive infrastructure investment
- Faster pathways to meaningful revenue at scale
At the same time, US buyers are demanding. Entering this market requires a level of credibility and readiness that many companies are not fully prepared for.
This creates a window for companies that are.
The companies and investors who come out of that week focused on deployment rather than narrative will have a meaningful advantage heading into the second half of the year.
A More Difficult, More Valuable Path
Climate tech is becoming harder to build.
And many of the companies that were funded on the assumption that it would behave like software are going to struggle as a result.
It is more capital intensive. It requires deeper engineering. It demands patience with longer sales cycles and more complex buyers.
But it is also becoming more defensible.
The companies that succeed in this environment will not just grow. They will become embedded in systems that are extremely difficult to replace.
From our perspective at Sea Change, the founders who are best positioned right now are those who:
- Understand the operational realities of their customers
- Build with deployment in mind from day one
- Treat credibility as a core asset, not a byproduct
- Are willing to engage deeply with infrastructure systems
The market is moving in this direction regardless of whether founders or investors are fully aligned with it yet.
The question is not whether climate tech will become more infrastructure-like.
It already has.
For founders and investors navigating energy and infrastructure markets in 2025, this shift is one of the most important dynamics to understand.
The question is not who has the best product.
It is who is building in a way that the market will actually adopt.
