Frontier Climate Tech: Where the Smart Capital is Moving Next
- May 23
- 5 min read
May 23, 2025 - As the climate crisis accelerates and policy landscapes evolve, smart capital is shifting toward a bold new frontier: climate technologies that push beyond the familiar domains of solar, wind, and electric vehicles. From carbon-to-value pathways and next-gen battery chemistries to ocean-based solutions and bioengineering breakthroughs, frontier climate tech is rapidly emerging as a vital—and potentially lucrative—pillar of 21st-century investing.
This new wave of innovation is capturing the attention of institutional investors, family offices, and sovereign funds alike, not only for its climate impact potential but also for the asymmetric upside it offers in undercapitalised sectors. These technologies are not just add-ons to existing energy portfolios; they represent entirely new value chains, business models, and global markets.
Direct Air Capture & Carbon-to-Value
One of the most promising areas of frontier climate tech is Direct Air Capture (DAC), where startups are building machines to pull carbon dioxide straight from the atmosphere. What was once considered science fiction is now a core pillar of net-zero strategies for governments and corporations. DAC offers a direct method to address legacy emissions and provides a critical tool for hard-to-abate sectors such as aviation and cement.
DAC systems work by drawing in ambient air and exposing it to chemical sorbents that bind with CO₂ molecules. Once saturated, the sorbents are heated or treated to release the pure CO₂, which can then be compressed for underground sequestration or transformed into marketable products. This process, though energy-intensive, is becoming more efficient with renewable-powered integration and modular scalability.
More intriguing still is the evolution from sequestration to carbon-to-value. This model leverages captured CO₂ as a feedstock to create fuels, chemicals, construction materials, and even diamonds. For example, companies like Twelve are using renewable electricity to convert CO₂ into jet fuel and polymers, while CarbonCure injects captured CO₂ into concrete, improving its strength and durability.
Investors are now placing early bets on companies at the intersection of DAC and synthetic chemistry, where scalability and market applications could unlock trillion-dollar markets.
Bioengineering for Climate Resilience
Synthetic biology—long associated with biotech and pharma—is now being redirected to solve environmental challenges. It involves the design and construction of new biological parts, devices, and systems or the re-engineering of existing ones to address problems like carbon sequestration, pollution, and agricultural sustainability.
This rapidly advancing field is already producing engineered microbes that can degrade plastic waste in oceans, fungi that break down toxic chemicals in soil, and crops that are gene-edited for enhanced carbon absorption or resistance to drought. These biological tools offer decentralised, low-energy alternatives to traditional industrial processes.
Startups like Pivot Bio are pioneering microbial replacements for nitrogen fertilisers, cutting nitrous oxide emissions and improving soil health. Others, like Living Carbon, are developing trees with accelerated growth and carbon uptake rates, offering a scalable natural carbon sink.
The convergence of biology and climate is driving a new generation of mission-driven companies, often emerging from university spinouts and synthetic biology incubators. Backed by venture funds that previously focused on genomics and healthtech, these firms offer investors exposure to biologically engineered sustainability—a sector poised to rival traditional agri-tech and even parts of the fossil fuel economy in terms of economic impact.
Ocean-Based Innovations
The ocean absorbs more than 90% of the world’s excess heat and nearly a third of anthropogenic carbon emissions, making it a powerful climate regulator—and a vast arena for innovation. Frontier ocean tech seeks to harness this capacity for climate-positive outcomes, while also preserving marine biodiversity and economic productivity.
Marine carbon removal is a leading frontier. Kelp farming, for example, grows fast and sequesters large amounts of CO₂, which can be sunk to the deep sea for long-term storage. Companies like Running Tide are developing ocean-based carbon sequestration systems using floating kelp platforms that naturally decompose and trap carbon on the seabed.
In parallel, startups are working on ocean-based hydrogen production, powered by offshore wind or solar, to create clean fuel sources near industrial shipping lanes. Algae-based sustainable aviation fuel (SAF) is also gaining traction, using marine biomass to replace fossil-derived jet fuel.
Institutional players are beginning to see blue carbon ecosystems—like mangroves and seagrasses—as viable, scalable carbon credit sources. Meanwhile, venture capital is flowing into maritime technology startups building autonomous ocean sensors, robotic restoration systems, and smart aquaculture platforms, creating new data and revenue streams from the ocean.
Advanced Storage & Grid Tech
As renewable energy proliferates, so does the need for intelligent storage and grid stabilisation. Wind and solar are inherently intermittent, and without the ability to store and dispatch energy effectively, their impact is capped. This opens the door for advanced battery technologies and smart grid infrastructure.
Beyond lithium-ion, which has performance and mineral supply constraints, new chemistries are emerging. Solid-state batteries eliminate flammable liquid electrolytes, improving safety and energy density. Iron-air and zinc-air batteries are being developed for multi-day storage at much lower costs.
Companies like Form Energy are engineering low-cost iron-air batteries designed for long-duration grid storage, while ESS Inc. is advancing non-toxic, recyclable flow batteries that can scale for industrial use. These technologies provide essential backup for renewables, especially in regions vulnerable to grid instability or seasonal generation gaps.
Simultaneously, AI-powered energy platforms are transforming how we manage the grid. DERMS (Distributed Energy Resource Management Systems) enable real-time optimisation of energy flows from rooftop solar, EVs, home batteries, and industrial sites. This decentralised intelligence ensures a resilient, balanced grid in an era of distributed generation.
The Institutional Advantage
While venture funds continue to play a vital role in de-risking frontier technologies, family offices and institutional capital are increasingly moving downstream—seeding project developers, co-owning IP, or acquiring scaled startups to drive vertical integration. This shift reflects the growing maturity of climate tech and the appetite for longer-term infrastructure-style returns.
Institutional investors are uniquely positioned to accelerate the commercialisation of frontier technologies by deploying blended capital models, including equity, debt, and guarantees. They can also provide patient capital and strategic governance to help scale climate solutions that require regulatory navigation and hardware deployment.
At Caerus Capital, we’re actively building co-investment platforms with leading institutions and innovators in the frontier climate tech space. Our thesis is simple: the best returns—both financial and environmental—come from early, strategic engagement with the technologies that will define the next economic cycle.
From Risk to Resilience
What sets frontier climate tech apart is its dual promise: solving some of the planet’s most complex challenges while offering exposure to markets that do not yet exist—but soon will. This is not speculative green investing; it’s strategic positioning at the edge of industrial transformation.
Smart capital isn’t just reacting to climate mandates—it’s anticipating systemic change. From carbon removal and climate-resilient biology to ocean tech and energy storage, frontier climate tech is where impact meets innovation at scale.
General Information Disclaimer
The information provided in this blog is for general informational and educational purposes only and should not be considered as financial, investment, or legal advice. While we strive to ensure accuracy and relevance, we make no representations or warranties, express or implied, regarding the completeness, reliability, or suitability of the information provided.