UK impact tech startups - companies founded to build solutions to the United Nations’ Sustainable Development Goals - have raised £2 billion in Investment this year as technology becomes increasingly important in tackling global problems.
New analysis published by Dealroom dated November 29, 2021, for the UK’s Digital Economy Council, has shown that impact investment in the UK has increased by 127% since 2018.
12 Impact Unicorns and Counting
The UK is now home to 12 impact unicorns - companies worth over $1 billion or more in value.
The unicorns are:
- Arrival (London)
- Octopus Energy (London)
- Babylon (London)
- ITM Power (Sheffield)
- Ceres Power Holdings (Horsham)
- Vertical Aerospace (Bristol)
- Compass Pathways (London)
- Depop (London)
- Ovo Energy (Bristol)
- Britishvolt (Blyth)
- Tractable (London)
- BenevolentAI (Cambridge)
Of these 12 companies, six are based outside of London, demonstrating the wide-reaching nature of the companies working in this space. These include Vertical Aerospace which is based in Bristol and is building zero-carbon, commercial flying taxis; ITM Power in Sheffield which designs and manufactures hydrogen energy systems; and Ceres Power Holdings in Horsham, which is creating low-cost next-generation fuel cell technology to enable companies to deliver clean energy at scale.
In addition, there are now 22 impact futurecorns, the high-growth scale-ups which are on track to reach unicorn valuation in the next few years. These include the alternative protein startup AgriProtein, fusion power research energy company Tokamak Energy and the leading mobile-delivered health and insurance provider Bima, with 25 million active users across Asia and Africa. As these companies grow and scale, they are predicted to become future leaders and take their technologies global.
Technology tackling global solutions
Impact investing has grown globally, with investors keen to back companies that will generate positive social and environmental impacts alongside financial returns. There are now nearly 900 impact startups and scale-ups in the UK using technologies such as artificial intelligence, deep tech, big data, and blockchain to develop next-generation solutions to global problems such as climate change, health, and food insecurity. From Dundee to Dorset, these companies have a combined worth of £50 billion and have created over 35,000 jobs.
Most of the capital from impact funds is going to companies creating affordable and clean energy and tackling the climate crisis, something investors across the globe are paying closer attention to, given the threat caused by global warming. Collectively, climate tech companies make up 65% of the deals in the impact space. It is being driven by companies such as the green energy provider Octopus Energy, which raised the biggest impact round this year of £438 million, the electric car subscription platform ONTO, which raised £130 million in a Series B round, and future energy company Newcleo, which launched earlier this year to disrupt the nuclear energy industry.
It’s not just energy companies that are leading the green revolution - Plastic Energy, based in London with industrial plants across Spain, raised £123m this year to transform plastic waste that would otherwise be destined for landfill into recycled oils that can be used to create clean, recycled plastic. Last year, UK climate tech investments made up more than a quarter (28.6%) of all climate tech deals in Europe and are expected to continue increasing in value this year.
As well as climate tech, the UK’s impact startups are focused on solving global health problems. For instance, Benevolent AI is the UK’s leading health impact company and uses big data and deep learning to discover more effective medicines and recently discovered a treatment for Covid-19, which the US healthcare regulator has approved. Other health tech companies using big data include Huma, which enables remote patient monitoring to reduce hospital readmission rates in countries including the UK and Germany, and Cera, an app that helps families provide proper care for their loved ones.
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