UK impact investment more than doubles since 2018

Written by by Mr. Kunal Sawhney, CEO, Kalkine Media

The technological advancements across the world have been spearheading the transformational shift to newer processes that are assisting in optimising the existing operations and end products. Contributing towards climate change, healthcare, clean energy solutions, food insecurity and several other causes, the technology landscape in the United Kingdom has been helping various enterprises from manufacturing to services to construction.

The ongoing processes certainly require a slew of advancements that can ameliorate the overall operations, subsequent to which the resultant objective can be achieved in a more efficient and affordable manner.

Bolstering the businesses and various other commercial setups with the applications of artificial intelligence (AI) and technology can assuredly help in levelling up the scale of operations, at a time when largest of the economies fear the resurgence of infection with the new Covid variant Omicron emerging at a sharp pace.

The World Health Organisation (WHO) has already warned about severe consequences following the outbreak of the new variant as a number of countries are contemplating the possibilities of reopening the international borders on a wider scale.

The tech startups operating with an objective of generating returns for the stakeholders while supplementing the environment have been highly preferred by the investors as the global forces join hands to bring down the carbon emissions, the decision that can comprehensively reduce the carbon footprint across the world.

The UK-based tech startups are helping in their respective capacities to provide solutions for the most pressing problems in the world including a number of climate change concerns, food insecurity and shortcomings in providing the best healthcare facilities. As a result of increased inclination of institutional investors and big-ticket money managers, the impact startups in the UK have managed to mobilise £2 billion investment in the present calendar year so far.

According to the Department for Digital, Culture, Media & Sport (DCMS), impact startups in the UK garnered an investment to the tune of £1.7 billion in the Covid-laden 2020. Surprisingly, the impact investment in the UK has more than doubled since 2018 with the quantum rising by 127%.

The impact startups based out of the UK remain aligned towards building a number of solutions to the United Nations’ Sustainable Development Goals. With more and more enterprises looking forward to incorporating tech-driven solutions within their operations, the proportion of startup investment has been progressively gaining pace with a large section of age-old conglomerates pledging to reduce the cumulative emissions from their operations.

With nearly half of the UK’s impact startups located outside London, the country is poised to witness all-round growth in the upcoming years as a number of startups have already attained a unicorn status, while many others are fast approaching towards the valuation of $1 billion. Locations including Briston, Sheffield and Horsham are adequately populated with impact startups that are based outside the City of London.

On a collective basis, all the impact startups employ more than 35,000 individuals. The combined valuation of these companies is approximately £50 billion. At the moment, there are a dozen of impact unicorns based out of the UK with six of them having main operations in London. Along with these, there are 22 impact futurecorns operating across the UK which are on track to achieve a billion dollar valuation in the forthcoming years as the nature of business remains aligned with high growth potential ideas.

The London based unicorns include Arrival, Octopus Energy, Babylon, Compass Pathways, Depop and Tractable. Ovo Energy and Vertical Aerospace are situated in Bristol, ITM Power in Sheffield, Ceres Power Holdings in Horsham, Britishvolt in Blyth and BenevolentAI  in Cambridge. The impact startups located outside London effectively demonstrates the wide-reaching enterprises operating to ease the challenges in the clean energy space and other environmental concerns.

The Bristol-headquartered Vertical Aerospace is building flying taxis for commercial usage with zero-carbon emissions, Ceres Power Holdings of Horsham is working to introduce low-cost fuel cell technology that will pave the way for energy corporations to deliver next-generation clean energy, while Sheffield-based ITM Power is developing and designing hydrogen energy systems.

The niche area of operations makes these enterprises unique and highly sustainable in the long term as large-scale businesses contemplate various avenues to source clean energy solutions from such startups to optimise their in-house processes, productively increasing the efficiency and resultant output.

Amid the futurecorns, fusion power energy corporation Tokamak Energy and alternative protein startup Agri Protein are progressing with their respective objectives. These companies are highly likely to attain unicorn status as they take their offerings on the global platform.

The proportion of impact investing has been on a rising run across the world with the market participants backing the enterprises that are focused to safeguard the environment throughout their operations, and, at the same time providing lucrative opportunities of wealth maximisation for international stakeholders. In the UK itself, the number of impact startups that are actively operating has risen to 900 as innovative ideas across the country are able to secure capital from various sources.

The numerous applications of artificial intelligence, big data, blockchain technology and big data are effectively helping to develop next-generation clean energy solutions that can back the big conglomerates and multi-billion dollar corporations.