There is now a shift in investment priorities towards solutions with stronger unit economics, capital efficiency, and credible pathways to scale.
Nowhere is this trend more pronounced than in the built world, or as we like to call it at noa: humanity’s OS. As the vast ecosystem of buildings, infrastructure, and urban energy systems that dictate how we interact with the world around us, the built world reflects our cultural, aesthetic, and technological values as a society.
The built world accounts for nearly 40% of global carbon emissions, far more than transport (including aviation), making its decarbonisation essential. While climate tech funding overall fell by 13% in 2024, built world technology proved resilient, experiencing just a 7% decline. This relative stability underscores the sector’s importance and the confidence investors place in its ability to drive tangible change.
As dry powder mounts, consolidation will become more prevalent, with well-positioned companies absorbing weaker players. However, one thing is clear: the built world’s role in climate tech is no longer a question of "nice to have." It is a necessity, and there is simply no net zero without built world decarbonisation.
Given the sprawling and omnipresent nature of humanity’s OS, what will 2025 hold for the sector? Combining data with the anecdotal evidence of combing through thousands of pitch decks, it’s clear that several trends are here to stay.
AI takes centre stage
Artificial intelligence has evolved beyond buzzword status in the built environment. In 2024, industrial automation investment surged by 61%, with one of the fastest growing drivers being renewables. AI-powered tools are already making an impact: streamlining solar farm construction, enhancing grid stability, and designing energy-efficient buildings with unprecedented precision.
In 2025, AI’s influence will only deepen. Scalable applications in energy management and infrastructure design will transform the sector’s approach to decarbonisation. AI-driven predictive analytics will enhance grid efficiency, reducing wasted energy and minimising reliance on fossil fuel backups. Smart construction platforms will help teams optimise materials use, cut emissions, and improve project timelines. With AI becoming a necessity rather than an experiment, its role as a climate tech enabler is firmly cemented.
Robotics coming of age
Labour shortages and rising costs have long plagued the construction and infrastructure sectors. The solution is becoming increasingly clear as the technology progresses: automation. Investment in early-stage building operations robotics grew nine-fold, signalling a fundamental shift in how structures are built and maintained.
Robotics will play an even greater role in 2025, particularly in renewable energy deployment and inspecting and maintaining critical infrastructure at scale. Automated systems are already streamlining offshore wind farm installation and maintenance, reducing human risk and speeding up project timelines. In construction, robotic bricklayers, 3D-printing systems, and autonomous site monitoring are enhancing efficiency while minimising waste. These technologies don’t just cut costs—they directly contribute to decarbonisation by reducing material overuse, improving energy efficiency, and enabling more sustainable building practices.
Electrification as a decarbonisation catalyst
Electrification remains a cornerstone of climate action. In 2024, $6.4B was invested in electrification technologies, with grid modernisation seeing a 40% funding increase. This is crucial as global electricity demand is expected to double by 2050; data centres alone will consume over 1000TWh by 2026, equivalent to the entire electricity use of Japan.
In 2025, key developments will further solidify electrification’s role in decarbonisation. Small modular reactors (SMRs) will gain traction, offering a flexible, low-carbon energy source to supplement renewable grids. Long Duration Energy Storage technologies will enable better load balancing, addressing intermittency issues that have long challenged the transition away from fossil fuels. The continued expansion of vehicle-to-grid integration will help stabilise power systems by allowing EVs to act as distributed storage assets. Electrification isn’t just about shifting away from fossil fuels—it’s about creating a more resilient and efficient energy ecosystem.
Regulatory clarity: a global perspective
Regulatory frameworks will continue to play a defining role in built world decarbonisation. In the US, shifting political attitudes may create uncertainty affecting investor sentiment, but an administration committed to slashing red tape may equally provide a boon to startups as planning and approval processes act as a significant bottleneck to particularly for large projects. It’s worth noting that the current climate tech surge started during Trump’s first term, with the value of global climate tech startups increasing by more than 10x between 2017 and 2021, led by the growth of key technologies like solar and EVs (and concentrated in the US).
In Europe, a relatively stable regulatory environment provides a foundation for sustained innovation and catalysing the sector directly. Just like feed in tariffs helped boost investment in solar in its early days, measures like the European Green Deal can boost confidence for sizeable and long-term investments that are needed to boost the sector. There will be opportunities for forward-thinking companies to align with emerging standards and lead the transition.
The built world’s decarbonisation imperative
The built world is no longer a secondary player in climate tech—it is a primary driver of decarbonisation. In 2025, AI, robotics, and electrification will continue to redefine the sector, offering practical, scalable solutions to some of our most pressing climate challenges. With investment prioritising impact and metrics over speculation, built world tech will take centre stage in the fight against climate change.
As startups navigate economic headwinds and evolving regulatory landscapes, one truth remains clear: decarbonising the built environment is not optional. It is an essential pillar of our collective climate strategy. The companies and technologies that embrace this reality will not only survive but thrive in the years ahead.
Arjun Jairaj is an Investor at noa.
