In this article, dealmaking business, the GS Verde Group note how CleanTech investment has soared, as data from Beauhurst indicates. Exploring the latest investment trends, the CleanTech sector is primed to boom in the wake of rising traditional energy costs.
The energy crisis has heightened calls to speed up the switch to renewable energy in the UK. Factors including extreme weather conditions, post-Covid economic ramp-ups and the country's vulnerability to gas price fluctuation have had a dramatic impact on energy companies and households alike. Yet 50% of the UK's electricity still being produced by gas-fired power plants.
But there are plenty of innovative cleantech start-ups now emerging, ready to take the helm in the UK's energy transition. The GS Verde Group recently advised on a deal that saw DEPLOY raise investment to bring cost-effective, long-term and environmentally-friendly water storage tanks to rural areas of the UK.
Whilst the pandemic did temporarily reduce global fossil fuel consumption and CO2 emissions, they have already returned, surpassing pre-lockdown levels. The need for green technology is clear, and many businesses and investors are on-board.
Data platform Beauhurst has tracked investment into the CleanTech sector: by last year, almost double the number of investment deals were secured, compared to 10 years prior. In fact, in 2021 the sector is raising more than four times the investment it was a decade ago.
Investment activity has not been hampered by the pandemic either - rather increasing the fundraising through 2021. The amount raised this year has already surpassed the total raised any year prior.
UK CleanTech sector: headline figures
There are 978 companies operating in the cleantech, Greentech or clean energy space. Of these, 9% are academic spinouts, three times the overall proportion of spinouts among ambitious businesses in the UK (3%). The UK's cleantech innovators are spread across the country, but are especially concentrated in London (247), the South East (134), and Scotland (109).
Since 2011, the UK's cleantech and sustainability sector has raised more than 2.8k deals, worth a total value of £8.11b. Of these, 903 were announced rounds (totalling £3.61b), whilst 1,598 of them—64% of all cleantech deals—were unannounced funding rounds (totalling £1.68b). Together, UK cleantech start-ups have also secured at least 2.4k innovation grants over the past decade.
CleanTech investment trends
Investors are now putting their weight behind the movement. Between 2011 and 2021, announced equity investment into high-growth cleantech companies saw significant growth, in both number and value. In fact, just 130 investment deals were secured by CleanTech businesses 10 years ago, amounting to £257m. But by 2021, this had risen to a record-breaking 366 investment deals, whilst the amount raised soared to £1.18b.
The total amount of funding raised in 2020 and 2021 remained high, as the pandemic failed to deter several large funding rounds. Looking ahead to the rest of 2022, 10 fundraising deals have already been agreed, worth a staggering total of £1.74b. This is largely thanks to battery manufacturing start-up Britishvolt securing funding of £1.70b. At full capacity, the business' new Gigafactory will produce more than 300,000 EV battery cells every year.
The GS Verde Group are business focused experts in getting deals done. The group combines multiple disciplines including law, tax, finance and communications, to act as a complete advisory team and support businesses with reaching their goals.
With thanks to Beauhurst for providing data and analysis.
Whether you are buying a business, selling a business, or raising funding, the need for expert advice is essential. Contact the GS Verde Group for more information.