Buoyant 2025 Predictions Review

Buoyant is preparing to publish our 2026 outlook, but before we do, we wanted to reflect on how well we did with our 2025 predictions. As venture capitalists, it’s our job to be good at this. Here’s our self-assessment of how accurate our crystal ball was last year.

TLDR: We were directionally correct across the board, albeit a bit too early on the trendline for a few predictions. Overall grade: A-

Insurance industry on the brink means high costs and coverage gaps 🏚️💰

• ‍Outcome: 2025 reinforced that climate-driven catastrophe risk + regulatory constraints + reinsurance costs are still translating into availability and affordability problems in key markets. Swiss Re reported that 2025 was the sixth-year insured losses exceeded $100M even though 2025 had a relatively “calm” hurricane season compared to 2024. The January 2025 Los Angeles wildfires were among the most destructive in U.S. history ($40B of insured losses and $65B in total property losses). Insurers responded by raising home owners’ insurance premiums significantly, especially in wildfire-prone areas. For example, State Farm secured regulator approval for a 17 % rate increase in California following these losses to help absorb future wildfire risks and pull backed writing new policies in the state. Expect property insurance premiums to increase across the globe as low-risk customers subsidize high-risk customers in the broader pool.‍
• Grade: A

Stock market volatility will cause exit activity to fall short of investor expectations 📉📈🌍

• ‍Outcome: IPO activity improved vs. 2023–24 lows but remained well below long-term averages. We saw new issuances reach a four-year high: 202 IPOs raised a combined $44B, however this was below investors’ expectations. The SPAC market ramped back up, doubling activity from 2024, offering an alternative to IPOs. The largest IPOs were Medline ($6.3B), Venture Global ($1.8B), CoreWeave ($1.5B), Figma ($1.2B), and others. Next year keep an eye out for Databricks, SpaceX, and Anthropic. The secondary market was on fire (almost doubling to $95B) as more companies stayed private longer and offered liquidity to early investors and founders in the form of secondary sales. It was not the gangbuster year VCs had wanted, but it was an improvement. However, we cannot definitely say this shortfall was due to stock market volatility. While poor post-IPO performance may cause other companies to stay private longer, the S&P was up 16.4% for the year and the NASDAQ was up 20.5%. LPs continue to press for liquidity from their private equity investments as the private M&A activity in 2025 did not materialize to the degree that everyone was expecting.‍
• Grade: B

Fossil fuels investment will outpace clean energy to feed the AI beast⛽️🔥🌍

• ‍Outcome: In 2024, gas and coal provided 55% of the U.S. data center electricity mix, while renewables and nuclear provided 25%. While there is currently no full published report that provides a 2025 breakdown of actual data center energy mix, we can infer from announcement of new data centers. Natural gas was the clear winner as the most dominant dedicated power disclosed, such as Oracle and OpenAI's second Stargate data center expected to be powered by an on-site 1.4 GW natural gas plant, and GE Vernova helping turn Homer City Generating Station into a 4.5 GW natural gas-powered data center campus. However, just because renewables as a dedicated power source was not as commonly disclosed does not mean it does not exist. For example, Meta and Invenergy signed 791 MW of new solar and wind for data centers, and Alliant Energy and QTS agreed to 750 MW of new renewable energy sources. On a MW basis, renewables are lagging behind natural gas.
• ‍Grade: A

A softer macro climate industry domestically and internationally🪶🌍

• ‍Outcome: For climate startups and equity financing, 2025 generally looked like a softer macro and tougher policy backdrop than the 2021–2022 boom years. According to Sightline Climate, venture and growth investment totaled $40.5B in 2025, a modest 8% increase from 2024, however number of deals fell, signaling more money was going into fewer but more competitive deals. PitchBook also characterized 2025 as a year with headwinds for climate-tech fundraising, with a decline in fund activity relative to the 2021 peak. This all was due to many factors, including economic uncertainty, tariff volatility, the partial rollback of Biden’s Inflation Reduction Act, lack of federal climate disclosures, and overall less federal support for renewable energy. At the same time, capex in clean energy (generation, grids, storage, electrification) remained very large in 2025, also likely driven from the phasing out of incentives over the next 1-3 years. Internationally, in 2025, the European Union (EU) significantly recalibrated its climate and sustainability agenda, moderating several key policies in direct response to economic and trade pressures from the Trump administration. The Omnibus Simplification Package was introduced in early 2025, which effectively delayed several aggressive climate regulations to preserve market competitiveness amid threats of U.S. tariffs and rising energy costs. While the UK maintained its long-term 2050 net-zero commitment, its domestic political landscape also faced increasing pressure from proponents of similar rollbacks. ‍
• Grade: B+

Data Centers’ explosive growth continues  🖥️⚡📈

• ‍Outcome: This was THE dominant story in the world of energy in 2025. Data centers, AI and energy were the buzz words of 2025, with market growth continuing to grow. Many hyperscalers and cloud providers report that clouds are sold out, capacity is constrained, and demand is outstripping supply.‍
• Grade: A+

Increasing private financing for nature-based solutions 🪨🌱🌍

• ‍Outcome: While this is directionally right, and there is real momentum including more structures, more corporate offtakes, and more blended finance, it’s starting from a small base and still dwarfed by the gap. Progress includes Builders Vision’s $70M guarantee that will unlock $124M for marine conservation over the next 15 years in the Bahamas. Looking at carbon credits more broadly, while the global average price fell by roughly 20% in 2025 due to an oversupply of older, low-quality credits, the total market value grew to an estimated $1.88 billion, up from $1.55 billion in 2024 (MSCI report). There is a wide range in price from $1 for basic renewable energy credits to $500/tCO2e for direct air capture. High-quality nature-based solutions range from nature-based avoidance (REDD+) at $7-$10/tonne to nature-based removals at $24-$50/tonne are estimated to grow in 2026 as the industry continues to moves towards quality.‍
• Grade: B

AI goes vertical 🤖🏗️🩺

• ‍Outcome: Horizontal use cases continue to dominate across industries, especially chatbots and copilots, reflecting their broad applicability and ease of use. General-purpose platforms currently account for roughly 69% of all AI software revenue in 2025 (NetGuru). However, this starts to shift when looking at industry-specific priorities. While direct spending on vertical models is smaller, the broader Vertical AI software market is valued between $45 billion and $172 billion, depending on the inclusion of broader SaaS "wrappers” (Gartner, Technavio). The emergence of vertical AI applications shows how AI adoption differs across sectors, with healthcare and finance leading other industries in adoption. We are giving ourselves a B+ because horizontal AI continues to dominate, especially from a VC funding perspective. Expect to see further verticalization in 2026. In the case of climate applications, we continue to see strong AI vertical solutions in weather predictions, climate risk measurements, digital twins of physical assets, and legal and regulatory analytical tools.‍
• Grade: B+

Batteries keep moving up and to the right 🔋🚗⚡

• ‍Outcome: It was a good year for batteries, with many new deployments, and with batteries being one of the anointed technologies of the US DOE along with geothermal, nuclear, and fossil fuels. According to Wood MacKenzie, total battery storage installations as of Q3 2025 surpassed 2024’s total, with utility scale deployments growing 27% and residential deployments growing 70%. Anecdotally, our LP Xcel Energy announced they will build the Midwest’s largest battery energy storage site of 600 additional MW in Minnesota. We believe this trend will continue as a near term solution for data centers and as new generating assets are slow to come online to meet growing demand.‍
• Grade: A+

"Bring Your Own Power" (BYOP) on the rise in the US⚡📈

• Outcome: More data center operators than ever before are discussing onsite generation, bypassing the grid. For example, 38% of facilities are expected to use some onsite generation for primary power by 2030, which is up from 13% in 2024. There were a number of high profile examples of this including the xAI Colossus data center in Memphis powered by gas turbines and OpenAI/Oracle Stargate data center in Texas powered by gas.  While our prediction was directionally right, the total number of actual deployments have been limited due to the interconnection wait times of 5-7 years, though we expect to see more in 2026.‍
• Grade: B-

Final Assessment

Overall Grade: A-

While many of our 2025 predictions were directionally correct, some of our predictions are early and we will see play out even further in 2026. We cited data where possible, otherwise relied on anecdotal evidence. Send us a note if you disagree with our assessment – we love a good debate!

Stay tuned for our 2026 predictions.