Adaptation Tech Finds a Foothold in VC, but LPs Still Need Convincing

Early-stage investing is not for the faint-hearted. More often than not, it depends on deep-pocketed backers willing to risk scarce capital on far-off horizons — on futures that may never come to pass. 

When it comes to adaptation, though, things are a little different. Climate disasters once believed to be decades away are already here. Risks are rising. Losses are stacking up. The long-feared future is now.

But does this mean that investors have a growing appetite for adaptation technology? It’s complicated.

Climate Proof checked the pulse of nine early-stage investment firms to gauge how sentiment toward this niche is shifting, and to discover what headwinds and tailwinds lie ahead. The picture that emerges is of a market gathering momentum. Certain adaptation verticals are clicking strongly with private investors — particularly those addressing headline-grabbing hazards. And while some political and market trends are running counter to the adaptation narrative, most of those interviewed remain bullish on the future.

The adaptation VCs tapped by Climate Proof have been out raising capital this year from a wide array of sources. Some are focusing on high net worth individuals (HNWIs) and family offices. Others are targeting the venture arms of corporations. And while hustling for investment dollars is hard work, VCs say the unavoidable reality of climate change is making their pitch easier. 

“I do think that the interest is in part rising because we are just having more natural disasters, and those things are hitting headlines and hitting P&Ls in a really tangible and fundamental way,” says Laura Fox, Co-Founder and Managing Partner at Streetlife Ventures — which is aiming to close its first fund in 2026. Laura and her Co-Founder, Sonam Velani, are backing urban climate tech solutions. Their adaptation-flavored investments this year include Rhizome Technologies, Eztia Materials, and ThreeV. “We see more folks on the corporate-investor landscape who are interested because those disasters are impacting either their own assets from a strategic standpoint, or they’re seeing how they’re destroying public market value for other companies,” Fox says.

That urgency is also speeding up deal flow. Start-ups that are actively solving for the consequences of climate disasters — or helping to mitigate their impacts in the first place — are raising bigger rounds at a faster pace. Stand Insurance, an InsurTech company that helps protect and insure homes against climate-driven risks, is a case in point. Less than a year after raising a US$30mn Series A in December 2024, it closed a US$35mn Series B on the back of rapid growth.

Caie Kelley, Partner at Lowercarbon Capital — which backed Stand in both rounds — says this could be the new normal. “The best of all companies will always race slightly ahead of schedule. They accelerate really quickly. There’s also been an enormous acceleration in the number of extreme weather events, and there have been more wildfires. In general, a growing amount of investment has gone into that space, and so those that are building really compelling companies have been able to attract capital ahead of their schedule,” she says.

Over at Tailwind Futures, an investment firm targeting adaptation technologies for climate-battered corporates, the venture arms of established companies are showing the most interest in climate-proofing tech. Founding Partner Emilie Mazzacurati says the corporate VCs she’s been speaking to are expressing concerns about physical climate impacts and are very curious about the adaptation market.

But interest isn’t limited to the usual suspects. “I am seeing a newfound interest from a number of foundations. Either they have been investing in mitigation, and now they’re open to investing in adaptation, or they’re coming from a social angle and an equity angle,” she says.

While Tailwind and Streetlife cast a wide net across the adaptation solutions space, other firms are focused more narrowly on specific climate hazards. This is true of Burnt Island Ventures, a water-focused investment house, which closed a second, US$50mn fund in October. Partner Christine Boyle says that in her particular corner of adaptation tech, limited partners (LPs) have been eager to open their wallets, thanks to the clear wins in the water theme.

“The high activity in exits — in liquidity events — in water in 2025 has [sent] a lot of interesting financial attention our way. There were seven larger-than-US$1bn deals in 2025, everything from Seven Seas to the acquisition of Ovivo,” she says. This hot streak has helped reinforce Burnt Island’s narrative, Boyle adds, which is that water tech is “in an S-curve moment” of rapid growth.

But in contrast to Mazzacurati, Boyle says impact investors seem to be drifting away from pure-play climate investments. “Impact investors don’t want to talk about climate. They want to talk about health and community and ending poverty. I think Bill Gates didn’t do us any favors,” she says, referring to the billionaire’s recent memo announcing a change in his philanthropic investing priorities.

But she explains that Burnt Island is able to make this pivot, too. “We do so much work in the treatment of water, the eradication of pollutants, and just generally water access and water availability that we were able to tell a story about community and health,” she explains.

Things look a little different from Darren Clifford’s perspective. As Managing Partner of Adapt [us] Capital — which is just one year old — he’s been on the phone with family offices and HNWIs, pitching his vision for adaptation tech. From these conversations, he believes that climate mitigation and decarbonization funds are still hoovering up dollars at adaptation’s expense.  “A lot of climate investors who focus on impact tend to prefer mitigation because it solves the [climate] problem in the long-run. There isn’t a recognition that adaptation will improve the quality of life for humanity and will be needed as well,” he says.

Just getting in the door with LPs has taken up a good chunk of adaptation VCs’ time this year — while closing the deal has been easier for some than others. In this game, knowing how to speak a particular LP’s language can be the difference between a commitment and a pass.

For some investors, a highly-targeted approach has proved successful. “Hazard-specific messaging — wildfire, water, wind, heat, and others — tends to draw the strongest engagement,” says John Robinson, Partner at Mazarine Climate, which invests in tech companies addressing water risks. “The language around this side of climate is far less politicized, but the concept of risk sits squarely at the center of the conversation.” He adds that messaging around ‘sustainability’, ‘transition’, and ‘circular economy’ is less common today, and less effective.

Attracting investors who play mainly in climate mitigation tech — like renewables, carbon capture, and energy storage — is also something of an art form. “It’s been rare where we’ve seen LPs only interested in adaptation,” says Fox. “[But] I think we’ve seen a lot of traditional mitigation investors interested in expanding the lens of what they’re looking at to adaptation.” Both Fox and Robinson say that for investors focused on climate impact, challenges related to measuring adaptation success can be a barrier to investment. Robinson says for some LPs adaptation can feel “too abstract”, with impact metrics that “feel less tangible than those in decarbonization.”

In some conversations, ‘climate’ is being dispensed with altogether. This is in part because investors are skittish about the climate agenda overall, given the Trump administration’s forceful opposition. “I’ve been on the phone with corporations who have very significant offerings related to climate, and who have said point blank, ‘We don't talk about climate’. We still offer all the services doing all those things, but we don’t include the word climate in how we describe them,” says Tailwind’s Mazzacurati.

She’s not the only one to have noticed this taboo. “‘Climate’ has become a harder word to use,” says Jay Ribakove, Principal at Convective Capital, a wildfire tech investor. Its investments this year include buzzy names like Gridware, Seneca, and Overstory. Like Robinson, he sees investor interest coalescing around the risk narrative more than the ‘climate’ and ‘sustainability’ themes of the early 2020s. LPs are also being drawn in by old-fashioned fundamentals. “The momentum is there. The size of the opportunity is enormous, and the companies [in the adaptation space] are showing a fair amount of financial strength, led by customers,” he explains.

While LPs’ understanding of ‘adaptation’ as an investment theme is maturing, some VCs are frustrated by how loosely the term ‘resilience’ is being used. In some circles, it’s often stretched to include innovations that have little to do with addressing climate shocks. Earlier this year, McKinsey published a widely-cited article on “climate resilience technology” a category including solutions to wildfire, flood, and heat risks — but also battery storage and smart-grid tools, which are more often at home in decarbonization and renewable energy discussions.

Mazzacurati does not care for this muddying of the waters. “I am worried about the term ‘resilience’ becoming like the term ‘sustainability’, something grossly overused that means anything and everything to different people, as opposed to the things that we do need to focus on — which is how are we going to deal with the physical impacts of climate change,” she says. 

While definitional spats are nothing new in climate world, there does seem to be a lurking fear that true adaptation innovations could be crowded out or overlooked by more nebulous ‘resilience’ investors.

Not everyone sees this as a big problem, though. “There’s this interesting intersection, where the big generalist funds are investing in ‘American Dynamism’,” says Anthony Cortese, Principal at Ponderosa Ventures, which is focused on the food, agriculture, and ocean sectors. ‘American Dynamism’ is an investment theme — popularized by Andreessen Horowitz among others — focused on companies supporting US national interests. “But if you look at a lot of American Dynamism tech, outside of defense, there is a lot of overlap with climate or resilience. And it’s just because people are realizing those are essential needs for our economy to run,” Cortese explains.

From his perspective, plenty of venture dollars that are not formally badged as ‘adaptation’ are finding their way to this theme, which is a net positive. “I think there'll actually be a day we get to where adaptation is so ubiquitous that people don’t use the term ‘adaptation’ anymore. It’s just baked into how we think about things.”

Early-stage investors are fickle creatures. Dollars move hither and thither with the latest trends, pumping up speculative bubbles in some sectors and depriving others of much-needed capital.

For the last three-or-so years, AI has been the darling of the venture world. Now, the mania over the technology has reached such a level that almost two-thirds of all US VC dollars invested over the last 12 months has gone into AI start-ups, according to Pitchbook. Over the same period, venture investment in climate tech has fallen. The sector now has a 5% share of deal value, down from almost 10% at the beginning of last year. And adaptation was only a sliver of this total amount to begin with. 

VCs had mixed takes on how the AI boom is complicating fundraising for adaptation tech. “We’ve noticed a dearth in capital,” says Cortese. “We feel very fortunate to have capital right now, especially in food and ag. I think the dearth in capital probably will yield to some companies dying off — but we also think these cycles are normal,” he adds.

For Clifford at Adapt [us], AI myopia is compounding his challenges as an emerging manger. “It is a difficult market to raise in if you are not in AI. Making it worse, few family offices have a mandate to allocate into adaptation. It is not a space where many people reach out to me asking how to get this exposure,” he explains.

But these difficulties do not appear to be universal. For some VCs, it’s all about knowing your targets. “If someone’s interested in climate, they’re not going to suddenly drop everything to go do AI if they have true convictions,” says Mazzacurati. “If they’re opportunistic investors, and climate was hot two years ago and now it’s not anymore, then, yeah, they’re going to be focused on AI.” Zeroing in on high-conviction investors, then, may be the best path to raising at this stage of the AI hype bubble.

AI and adaptation tech are not mutually exclusive investment propositions, however. Most adaptation software plays have AI as part of their core value proposition. Rhizome, for example, uses a machine learning model chain framework to evaluate the vulnerability of grid assets to climate shocks and recommend resilience plans. ThreeV, which operates in the same grid resilience space, uses AI and computer vision technologies to run automated asset assessments. 

“At least half of the opportunities we’re evaluating are fundamentally AI companies with applications in climate adaptation,” says Robinson on Mazarine Climate’s focus. “We don’t treat AI and adaptation as separate categories. In fact, the strongest opportunities in adaptation are being built by teams leveraging AI to solve real, physical-world risk problems,” he adds.

Heading into 2026, most of the VCs that spoke with Climate Proof are optimistic. Several expect to close funds in the double-digit millions before too long and ramp up deployment. This should, in turn, excite more potential adaptation tech founders into the space to soak up these dollars, start companies, and reinforce the investment case.

Looking ahead, Streetlife’s Fox expects that escalating natural disasters, while causing immense pain and misery across the US, could act as a tailwind for adaptation investment. “People don’t buy unless they have experienced disasters themselves — or have a need for those kinds of products in place,” she says. As more individuals and businesses are hit, more investors are likely to see the value in adaptation tech.

Convective Capital’s Ribakove thinks similarly. He also sees investors responding to a rising tide of litigation, complaints, and reputational damage triggered by climate disasters. While many climate-related regulations at the federal level have been tossed on the scrapheap by the Trump administration, this isn’t likely to stop lawsuits from being filed against corporations that have not taken the necessary steps to adapt their operations in a more volatile climate context. 

“The liability is real. Utilities that spark fires, landlords whose tenants have health issues during heat waves, cities that flood are being held responsible — when there's liability, there’s now financial incentive, and that creates budget,” says Ribakove. 

These rather morbid tailwinds, then, could see 2026 convert a whole lot more LPs into adaptation tech fans, and bring in more private capital into a theme still fighting for relevance under the broader climate VC label. 

Thanks for reading!

Louie Woodall
Editor