Business Secretary Alok Sharma says new public-private venture fund will help clean tech start-ups 'drive a green and resilient economic recovery'
The worsening recession may present an immense challenge to the UK's green start-up community, but the government has this week sought to provide the sector with a boost through the launch of a major new venture capital fund.
Backed by an initial £20m of government funding and a further £20m from CCLA, one of the UK's largest charity fund managers, the new Clean Growth Fund will aim to mobilise venture capital investment to "supercharge the development of next generation clean, low-carbon technologies" in support of the UK's net zero emissions goal.
The government said the fund could reach £100m by autumn 2021 through private sector fundraising.
The fund will be accessible to UK-based companies driving green technology across the power, transport, waste, and building energy efficiency sectors. Energy storage and smart grid technologies, renewable heating and ventilation systems, and biofuel and bio-energy technologies have all been highlighted by the government as areas of potential interest.
Business Secretary, Alok Sharma, said green start-ups had a key role to play in driving the UK's economic recovery.
"The need for innovative and ambitious ideas across green industries has never been greater," he said. "I am pleased that with the help of this fund, promising clean growth start-ups will be able to step up to accelerate the UK's recovery, while supporting our path to net zero by 2050. This pioneering new fund will enable innovative low-carbon solutions to be scaled up at speed, helping to drive a green and resilient economic recovery."
His comments were echoed by James Bevan, chief investment officer at CCLA, who said the time was right for the fund manager to step up investment in "the very best early stage technologies to support the UK Net Zero objective".
"Through the Clean Growth Fund, we now look forward to working with other investors to support these exciting young UK companies aiming to reduce carbon emissions," he added.
The Fund is now seeking to make investments at early stage, seed or Series A rounds in innovative clean growth start-ups. The fund will invest in businesses with a prototype product or service demonstrating a clear contribution to reducing greenhouse gases together with compelling evidence of market demand. It is to be managed by Clean Growth Investment Management LLP (CGIM).
Beverley Gower Jones, managing partner of CGIM, hailed the Clean Growth Fund as "a significant boost to the country's low carbon sector and a clear signal from the UK government that new and innovative technologies will be crucial to deliver Net Zero and the clean growth agenda".
She added that the fund now wanted to "hear from the very best clean technology businesses from across the UK".