Last year, £5bn was invested in UK business tackling climate change and environmental pollution. Who’s backing who? Where is the money going?
CapEQ’s research team explain.
You don’t need us to tell you that environment and climate change are at the top of the political and economic agenda across the developed world.
Despite only accounting for 2% of global carbon emissions, in the last five years the UK has moved from aspirational action plans to concrete policies to achieve Net Zero neutrality by 2050 – even 2030 in some areas.
As a result, the transformation of the business landscape is well underway. Almost £5bn ($6bn) was pumped into nearly 600 UK cleantech* companies in 2022 – equivalent to two UK firms securing backing every working day to decarbonise industries, improve air quality, and recycle new materials.
However, backing businesses using emerging technologies has been risky in some cases. EV battery maker British Volt recently went into administration, while wholesale energy price hikes spurred the collapse of several challenger energy providers, leading to distress sales including the sale of Bulb Energy to Octopus Energy.
CapEQ Head of Research Lee Robbins commented: “It’s encouraging to see that the bulk of investment activity is from venture capital trusts specialising in early stage companies. These will all need to exit in the not too distant future, and we can expect some large multinationals to make a play for these emerging game-changers. It’s safe to say that current levels of investment and M&A activity will continue for the foreseeable future.”
Transactions covered in our latest M&A market report include:
- BP acquired EV home charging provider Chargemaster in 2018 for £130m. Chargemaster founder David Martell went on to found Evios in the same space, and last year Evios raised £5.8m to acquire smaller rival Andersen EV.
- UK e-motorbike manufacturer Zapp – only founded in 2017 – completed a complex deal to list on NASDAQ for $600m by merging with an already-listed shell company – providing an exit for its 11 investors.
- Acquisitive energy infrastructure contractor Keltbray snapped up substation power storage specialist IDEC to form a new division.
* Cleantech is an umbrella term for businesses focused on addressing air quality, emission reduction, new materials, renewable energy, power storage, and waste recycling.
The report is free to download, and helps anyone interested to learn who’s backing who, who’s acquiring who, and which subsectors are attracting the lion’s share of investment.
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