In the latest funding cycle tracked through mid-May 2025, investor sentiment has coalesced strongly around cybersecurity and energy technologies. Despite broader venture funding volumes remaining below their 2021 and early 2022 highs, what stands out is the sectoral precision with which capital is now being allocated. A deep dive into recent mega-rounds reveals that security—particularly cloud-native and AI-driven platforms—and clean energy solutions are commanding disproportionate attention, surfacing as both defensive and offensive plays in an uncertain geopolitical and macroeconomic climate.
Security Surges Ahead Amid Escalating Cyber Threats
Cybersecurity startups have continued to attract significant funding in 2025, as evolving threat vectors—from AI-enhanced phishing attacks to nation-state ransom threats—spur enterprise and government buyers to rethink their defense architectures. Leading the funding charts recently was Cyera, an Israel-founded, cloud-native data security platform, whose $300 million Series C round in April 2025 attracted investment from Coatue, Sequoia Capital, and Spark Capital (Crunchbase News, April 2025).
Cyera’s surge in valuation—reportedly exceeding $1.5 billion—underscores the rising demand for platforms that offer real-time insight into data lineage, classification, and protection across an increasingly fragmented multicloud environment. The company’s USP lies in integrating generative AI into data governance layers, offering autonomous suggestions and policy alerts—a functionality that’s rapidly becoming table stakes in enterprise-grade cyber platforms.
In tandem, Wiz, a fellow Israel-founded cloud security unicorn, is rumored to be in late-stage talks for a $1.2 billion round at a $14 billion valuation, led by Insight Partners and Lightspeed Venture Partners (CNBC, May 2025). This would rank among the largest cybersecurity investments of the last five years and would further cement cloud-native approaches as the dominant enterprise security paradigm.
What distinguishes both Wiz and Cyera is their overlapping focus on data-aware security controls. Rather than legacy detection and prevention tools, these platforms prioritize visibility, context, and automated response, echoing the “Shift Left + Shift Right” trend—the need to embed security earlier in the software lifecycle and extend it post-deployment.
Clean Energy Enters Scaling Phase Beyond Early Innovation
On the energy side, the standout deal in recent weeks was the $431 million raise by Form Energy, a grid-scale storage company developing long-duration iron-air battery systems. This round—led by BlackRock and Capricorn Investment Group—is not merely large; it reflects a maturation in investor philosophy toward industrial decarbonization (Forbes, April 2025).
Long-duration storage is viewed as a linchpin for integrating variable renewables into base-load grid systems. Form Energy’s strategy aligns with what McKinsey this month called the “industrial hydrogenification of storage”—a trend where heavy materials like iron offer ultra-low degradation and lifetime costs compared to lithium-ion (McKinsey Insights, May 2025). The company’s continued buildout of its 100MW pilot facility in West Virginia positions it well for production tax credit (PTC) benefits under the IRA framework and could signal U.S. strategic intention to localize storage production amid China-centered supply chain tensions.
Parallel to Form’s raise, solar infrastructure leader Nexamp secured $250 million from Goldman Sachs’ Sustainable Investing division (VentureBeat Green Tech, April 2025). Nexamp’s edge lies in being vertically integrated—developing, owning, and operating community solar projects—reducing third-party friction. Their funding intends to back 2GW of new installations targeting dense Northeast U.S. markets by mid-2027. This reflects investor bets not only on new renewable capacity but on distributed smart grid participation linked to IoT-driven load responsiveness.
Table: Recent Major Funding Rounds in Security and Energy (April-May 2025)
The following table summarizes select major transactions that underline the concentration of capital in cybersecurity and clean energy verticals:
| Company | Sector | Round & Amount |
|---|---|---|
| Cyera | Cybersecurity (Cloud-native) | Series C – $300M |
| Form Energy | Energy Storage (Iron-air) | Series D – $431M |
| Wiz | Cybersecurity (Cloud) | Private Round (Pending) – $1.2B |
| Nexamp | Renewable Energy (Solar) | Corporate Investment – $250M |
These rounds exemplify private capital’s pivot toward categories underpinned by strong secular tailwinds, regulatory incentives, and demonstrable product-market fit. The size and structure of these rounds also point to a trend toward later-stage, scale-focused bets rather than early experimentation.
Macroeconomic and Regulatory Underpinnings
The funding momentum in both sectors is not occurring in a vacuum. The U.S. federal backdrop, particularly shaped by the Bipartisan Infrastructure Law and the 2024 Inflation Reduction Act expansions, has institutionalized billions in energy transition incentives. Commercialization windows for advanced batteries, grid innovation, and DER (distributed energy resource) integration have become considerably more bankable as a result of loan guarantees and PTC guidance finalized in late February 2025 (Energy.gov IRA Guidebook, 2025).
On the security front, 2025 has brought an even tighter compliance environment. The SEC’s cybersecurity disclosure rules, expanded in Q1 of 2025 to mandate incident reporting within 72 hours, have triggered a rush among public and pre-IPO companies to shore up risk visibility (SEC Press Release, March 2025). Moreover, Biden’s National Cybersecurity Strategy implementation roadmap, updated in April 2025, further operationalized public-private threat intelligence sharing—benefiting startups that can plug into SIEMs and C-Suite dashboards rapidly (White House Briefing, April 2025).
Investor Behavior: Bias Toward Scalable Infrastructure
VC and PE firms appear increasingly focused on capital efficiency and scalability. Platforms offering embedded services (like APIs for cloud security orchestration or grid-to-vehicle charging harmonization) are seeing stronger investor enthusiasm. According to PitchBook’s Q1 2025 Data Infrastructure Report, enterprise resilience, compliance-native tooling, and AI-assisted decisioning systems are thematic priorities for fund managers deploying capital above $100 million in ticket size (PitchBook, April 2025).
Similarly, energy investors are pivoting toward hard tech that meets near-term commercial readiness. As noted in Deloitte’s 2025 Energy Investment Outlook, there’s a growing preference for technologies already qualified for DOE subsidies or with pilot deployments underway (Deloitte Insights, May 2025). This explains why players like Form Energy—which has state credits, federal mapping, and consortium backing—outperform early-stage R&D alternatives in fundraising velocity.
Looking Forward: What Capital Concentration Tells Us
While the overall venture capital environment remains cautious, the bifurcation in funding reveals a maturing market. Investors are not retreating altogether; instead, they are doubling down on both necessity markets (cybersecurity) and transitional imperatives (clean energy). This not only shapes the startup ecosystem but also realigns exits potential: SPACs are no longer viable default paths, and IPOs are again reserved for firms that clear growth, margin, and governance thresholds likely attractive in 2026–2027 public windows.
On a strategic level, security and energy firms showing global expansion capabilities, cross-vertical integrations (e.g., cybersecurity tools tailored for energy companies), or strong government procurement linkages will command further valuation premiums. The next funding wave is also expected to be more geographically diverse, with sovereign wealth co-investment and South-East Asian infrastructure funds increasingly participating in deals led by U.S. firms.
Looking ahead to mid-2026, key watchpoints will include rollout velocity from funded firms, regulatory adaptation (e.g., post-election shifts in federal clean energy budgets), and capital markets reopening for late-stage exits. Until then, the concentration of funding in cyber and energy is not just a reflection of hype, but of pressing, commercially moving tectonic plates.