Our ClimateTech Index 2024
Today we have launched, in partnership with ClimateTech VC 2150, our inaugural ClimateTech Index, featuring the fundraising journeys of the 1,000 highest funded UK-based ClimateTechs.
The Index, launched features firms from across the economy and spanning the entire country, with the top 1,000 UK ClimateTechs valued at a combined £26bn today. Over the last two decades, startups in the sector have raised over £15bn combined, and secured over £960m in grant funding. These firms represent a massive growth opportunity for the UK, and currently employ over 24,000 people.
There are three unicorns in the Index, Octopus Energy, Zenobē, and Ovo Energy, and five “unicorn regions” with ecosystems valued at over £1bn each, including London, South East England, South West England, East of England, and Scotland.
Within the Index, energy firms raised the most of all sectors, topping £7.4bn. Whilst the average startup in the Index raised just over £3.6m, firms in the built environment and nature-based solutions sectors have, on average, raised a third less than this. Although both sectors saw funding increase by 50% between 2022 and 2023, they remain underfunded relative to the rest of the Index.
Despite the stunning success of firms in the Index, there are clouds on the horizon. Whilst ClimateTech has remained relatively resilient to economic headwinds, firms in the Index saw both overall and average funding decrease between 2022 and 2023, the first drop since the Pandemic hit in 2020. Meanwhile, the overall value of the sector also dropped by £500m. 2023 also saw the highest number of firm failures, with 24 firms going bust, and only nine exits, the lowest since 2019.
There is also a pronounced valley of death at the later stage of funding, with only a third of startups that have raised their Series A having raised again. Series A was also the funding stage at which most firms failed in the Index.