Elbow Beach closes second climate impact fund at £63m to back UK startups

Elbow Beach, UK’s climate impact seed investor, has closed its second fund - Climate Impact Fund 2, at £63 million capital, including up to £50 million from the British Business Bank through its Enterprise Capital Funds programme.

With £40 million of immediately deployable capital, Elbow Beach has activated the fund which aims to back up to 36 early-stage British startups over the next 4 years, accelerating the scaleup, development and export potential of some of the nation’s best early-stage technologies.

The fund’s overarching objective is to back technologies that will make a meaningful impact by solving big problems, enabling industries to become more efficient and cost-effective while transitioning to low carbon operations. Its strategy includes investment in automation and AI, carbon capture, electrification, and low-carbon materials.

Jon Pollock, CEO and Managing Partner, Elbow Beach: ''Elbow Beach’s new fund is targeting the intersection of efficiency gain and climate impact. Growth is what brings financial returns and impact together. The fund’s strategy is to help match technology against big customer problems and steer companies towards their end markets. We’re looking at investments including technology that halves energy use for household products like vacuums and dishwashers, and improves crop yields through robotics and AI. The UK is second only to the US in total number of climate technology startups, but British businesses attract less than half the funding of their American counterparts. Elbow Beach is on a mission to plug that equity gap and ensure Britain remains a global leader in climatetechnology innovation. Being green isn’t enough in isolation - technology will only be adopted if it makes commercial sense. We’re going to help nurture the next generation of founders who are driving real transformation and who have the potential to provide customers with better, more cost-effective solutions at scale. The backing from the British Business Bank is a real vote of confidence in our mission and in Britain’s entrepreneurs. We’re really looking forward to working with their team.''

Elbow Beach has been supporting early-stage technology companies from pre-seed through to Series A and scaleup since 2021, applying models which are specifically designed to help startups progress and unlock their value potential. Its first £20 million fund backed companies including: Munro Vehicles, the Scottish-based manufacturer of an all-electric utility vehicle for use in heavy industry; Anaphite, the Bristol-based chemical engineering firm that enables EV batteries to be made using less energy; and Bristol-based WASE, that turns wastewater into energy.

Christine Hockley, Managing Director and Co-Head of Funds, British Business Bank: ''We are pleased to make this commitment to Elbow Beach as they back startups pioneering technology solutions to global climate challenges. Our Enterprise Capital Funds programme is key in helping to develop and maintain effective venture capital provision in the UK, lowering the barriers to entry for emerging fund managers. Our commitment to Elbow Beach builds on the programme’s track record and will help early-stage Founders in the climate impact sector across the UK to build their businesses.''

www.elbowbeach.com

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