Elbow Beach, a UK-based climate impact seed investor, has announced the launch and first close of its second fund.
The £80M (nearly €95.6M) Climate Impact Fund 2 has secured £63M (nearly €75.28M) in commitments, including up to £50M (nearly €59.74M) from the British Business Bank through its Enterprise Capital Funds programme.
With £40M (nearly €47.79M) available for immediate deployment, the fund aims to support up to 36 early-stage British startups over the next four years. The goal is to accelerate the scaleup, development, and export potential of emerging technologies in the UK.
Elbow Beach is a seed investor focused on climate technologies that can drive industry change. The firm supports innovators developing clean technologies that enhance industrial efficiency and performance.
The firm’s investments target companies with the potential to deliver value to customers while contributing to climate goals.
The aim of the new fund
Elbow Beach’s second Climate Impact Fund aims to invest in technologies that address industry challenges and support the transition to low-carbon operations.
The fund’s strategy includes backing developments in automation, AI, carbon capture, electrification, and low-carbon materials. The goal is to enhance industry efficiency and cost-effectiveness while reducing emissions.
Jon Pollock, Elbow Beach CEO and Managing Partner, says, “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.”
Pollock further adds, “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 climate technology 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 continues investment in climate tech
Elbow Beach has been investing in early-stage technology startups since 2021, providing support from the pre-seed phase through to Series A and scaleup stages.
The firm uses tailored investment models designed to help startups grow and realise their market potential.
Its first fund, worth £20M, supported several companies, including Munro Vehicles, which produces electric utility vehicles for industrial use; Anaphite, a chemical engineering company focused on improving EV battery production efficiency; and WASE, a company that develops technology to convert wastewater into energy.
Christine Hockley, MD and Co-Head of Funds, British Business Bank, says, “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.”
Brief about the British Business Bank
The British Business Bank, established in 2014, is the UK government’s economic development bank. It aims to improve access to finance for smaller businesses and support the transition to a net zero economy. The bank manages finance programmes across the UK and currently supports over £17.4B in finance for nearly 64,000 smaller businesses.
Additionally, the bank works to raise awareness of funding options through its Finance Hub, offering independent information and resources. It also administered the government’s Coronavirus loan schemes and the Future Fund, which provided £80.4B in finance to 1.67 million businesses. These schemes are now closed.
The British Business Bank is a public limited company registered in England and Wales. It is wholly owned by the UK government but is not a banking institution and is not regulated by the Prudential Regulation Authority or the Financial Conduct Authority.
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