UK start-ups which focus on the environment and other sustainable development raised GBP2.3 billion this year, after a wave of investment in UK clean energy companies.
The record amount was up from GBP1.71 billion last year and GBP1.57 billion in 2019, according to figures from the data provider Dealroom and the UK’s Digital Economy Council.
The analysis focused on so-called “impact” start-ups in areas covered by the UN’s 17 Sustainable Development Goals, including health, security, climate change and energy scarcity.
Nadine Dorries, the digital, culture, media and sport secretary, said that the strong increase was a vote of confidence in the UK: “From world-class AI discovering new treatments for Covid-19 to green energy solutions paving the way to a net-zero future, UK tech is transforming the world for the better”.
Investment in the area has risen by 127 per cent since 2018, in line with rising investment in climate and health technology more generally. Clean technology firms made up the bulk of all impact investment, with 65 per cent of all deals involving firms seeking to address the climate crisis.
Octopus Energy, the electricity supplier, sealed one of the most significant transactions, securing GBP438 million in funding from Al Gore’s Generation Investment Management. The electric car subscription service provider ONTO and the plastics recycling company Plastic Energy raised GBP130 million and GBP123 million each in impact investment.
The UK has hosted 164 impact finance rounds this year, compared with 58 in Sweden, 75 in France, 99 in Germany and 476 in the US.
However, the UK trailed some its northern European rivals in terms of total investments, with German impact start-ups at GBP2.4 billion while businesses in Sweden attracted GBP3.3 billion, after the Swedish battery maker Northvolt raised GBP2.75 billion through its biggest financing round ever.
French impact starts-up brought in GBP1.42 billion, while US impact start-ups raised GBP20 billion in investments.
The UK is home to nearly 900 impact companies, which have a combined value of GBP50 billion and employ 35,000 people, of which 12 have been designated impact unicorns, because of having valuations of more than GBP1 billion.
Six of the UK’s impact unicorns were based in London, including the healthcare company Babylon and the artificial intelligence developer Tractable.