UK impact startups raise £2 billion to solve the world’s greatest challenges
- British technology is helping to solve some of the world's most pressing problems related to climate change, health and food insecurity
- Impact startups in the UK raised £ 2 billion in investments in 2021, up from £ 1.7 billion the previous year
- Impact Investment is up 127% in the UK since 2018
- Together, these companies are worth £ 50 billion and employ over 35,000 people
UK impact tech startups - companies created to develop solutions to the United Nations Sustainable Development Goals - have raised £ 2 billion in investments this year as technology becomes increasingly important in tackling global problems .
A new analysis released today by Dealroom for the UK Digital Economy Council has shown that impact investing in the UK has increased 127% since 2018.
It does so as Digital Minister Nadine Dorries is hosting the Future Tech Forum in London this week, marking the end of Britain's G7 presidency. Ministers from governments around the world will take part in the two-day event. You will meet with world-leading experts from industry, civil society and academia to discuss future policy issues related to the development and use of digital technologies. In particular, they will discuss how technology can make positive global change and achieve some of the ambitious goals that nations agreed upon at COP26.
12 impact unicorns and counting
The UK is now home to 12 Impact Unicorns - companies valued at over $ 1 billion or more.
The unicorns are:
- Arrival (london)
- Octopus Energy (London)
- Babylon (London)
- ITM performance (Sheffield)
- Ceres Power Holdings (Horsham)
- Vertical Aerospace (Bristol)
- Compass Paths (London)
- Depop (London)
- That energy (Bristol)
- British volts (Blyth)
- Towing vehicle (London)
- Benevolent AI (Cambridge)
Of these 12 companies, six are based outside London, which shows the vast nature of the companies that operate in the field. These include Vertical Aerospace, based in Bristol, which builds carbon-free commercial air taxis; ITM Power in Sheffield, which designs and manufactures hydrogen power systems; and Ceres Power Holdings of Horsham, developing low-cost, next-generation fuel cell technology to enable businesses to deliver clean energy on a large scale.
In addition, there are now 22 Impact Futurecorns, the high-growth scale-ups that are well on their way to hitting the Unicorn rating in the next few years. These include the alternative protein startup AgriProtein, the fusion energy research energy company Tokamak Energy and the leading mobile health and insurance provider Bima with 25 million active users in Asia and Africa. As these companies grow and scale, they are likely to become leaders in the future and deploy their technologies globally.
Technology for global solutions
Impact investing has increased around the world, with investors keen to support companies that have positive social and environmental impacts in addition to financial returns. There are now nearly 900 impact startups and scale-ups in the UK using technologies like artificial intelligence, deep tech, big data and blockchain to develop next generation solutions to address global issues like climate change, health and food insecurity. From Dundee to Dorset, these companies are valued at £ 50 billion and have created over 35,000 jobs.
Most of the capital from Impact funds goes to companies that create affordable and clean energy and fight the climate crisis, something investors around the world are paying more attention to in light of the threat of global warming. Taken together, climate technology companies account for 65% of the business in the scope. This is being driven by companies like green power company Octopus Energy, which raised the largest impact round of £ 438 million this year, electric car subscription platform ONTO, which raised £ 130 million in a Series B round, and future energy company Newcleo , which was launched earlier this year to disrupt the nuclear power industry.
It's not just energy companies leading the green revolution - Plastic Energy, based in London and with industrial facilities across Spain, has 123 million recycled plastic this year. Last year, UK air conditioning investments accounted for more than a quarter (28.6%) of all air conditioning deals in Europe and are expected to continue to grow in value this year.
In addition to climate technology, the UK's impact startups are focused on solving global health problems. For example, Benevolent AI is the UK's leading health impact company, using big data and deep learning to discover more effective drugs, and recently discovered a treatment for Covid-19 that was cleared by the U.S. health regulator. Other health technology companies using big data include Huma, which enables remote patient monitoring to lower hospital readmission rates in countries like the UK and Germany, and Cera, an app that helps families care for their loved ones properly.
Digital Secretary Nadine Dorries said:
From world-class AI discovering new treatments for Covid-19 to green energy solutions paving the way to a net-zero future, UK technology is changing the world for the better.
Our Impact startups are raising nearly £ 2 billion in investments this year to tackle some of the most pressing problems we face as a planet.
We want to harness the power of technology to make greener, healthier and safer choices and today I am hosting the first Future Tech Forum in London to discuss how we can achieve this through future governance, policy and collaboration.
Luisa Alemany, Associate Professor of Management Practice in Strategy and Entrepreneurship at the Institute of Entrepreneurship and Private Capital at London Business School, said:
Impact investing has come a long way from its inception in the late 1990s, when it was considered more of a philanthropic endeavor, until investors realized that these investments could bring not only social benefit but also financial return. The focus is on technology because the way to scale social impact is to apply science and technology. From biotech to nanotech, cleantech, computer science and medicine, technology not only improves our lives, it also finds solutions to these pressing problems that only entrepreneurs with the right funding can dare to do.
Eric Archambeau, Partner and Co-Founder of Astanor Ventures, said:
There are some brilliant, impact-minded UK entrepreneurs who are developing innovative technologies to put nature back at the heart of the economy. It is solutions like this that will transform the economy from an extraction system to a system of regeneration, and entrepreneurs are the main drivers of this transition.
Remus Brett, General Partner at LocalGlobe and Latitude, said:
COP26 and the ongoing Covid-19 pandemic have highlighted the need for bold solutions to address these ongoing challenges. Businesses are realizing they need to make significant change, and startups like Supercritical can help them make real change, not just greenwashing.
Rana Yared, General Partner at Balderton Capital, said:
With more money being invested in UK tech companies than ever, it is vital to see that more and more money is being poured into supporting this new breed of impact companies. These companies have the dual mission of making a positive impact in the world while being self-sustaining businesses. As these companies grow and scale, it is important that they have the right conditions in order to thrive and become global leaders.
Gerard Grech, founding CEO of Tech Nation said:
The UK technology ecosystem is constantly innovating to solve societal, economic and environmental challenges - nationally and globally. The contribution of these inspiring impact tech scaleups has never been more important - as the surge in impact tech investments this year shows. UK Net Zero tech companies alone have nearly doubled in value over the past year (skyrocketing from $ 24.4 billion to $ 47.6 billion). However, with 40% of the technology required to achieve net zero is not yet in mass market scale, there is still enormous potential to be exploited. The UK technology ecosystem must do everything it can to support and scale the effects of UK technology scale-up that are shaping our society, economy and future.
END
Notes to the editors:
The UK's 12 Impact Unicorns are:
- Arrival (london)
- Octopus Energy (London)
- Babylon (London)
- ITM performance (Sheffield)
- Ceres Power Holdings (Horsham)
- Vertical Aerospace (Bristol)
- Compass Paths (London)
- Depop (London)
- That energy (Bristol)
- Britishvolt (Northumberland)
- Towing vehicle (London)
- Benevolent AI (Cambridge)
Contact: aimee@burlington.cc
About DEC
The Digital Economy Council is a non-statutory advisory committee of independent members set up to advise the government. The aim is to leverage the expertise of the industry and the broader tech community to develop a world-leading digital economy that works for everyone.
About dealroom:
Dealroom.co is the leading data provider on startups, growth companies and tech ecosystems in Europe and worldwide. Dealroom.co was founded in Amsterdam in 2013 and today works with many of the world's best-known investors, entrepreneurs and government organizations to provide transparency, analysis and insights into startups and venture capital activities.
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