New research released today from Dealroom and Tech Nation, supported by ImpactCity and Danske Bank shows that European startups are more impact-focussed than their global peers and that the UK has had a surge in impact investing – with a 9.5x increase between 2014 and 2019.
Impact investing aims to have a positive societal and/or environmental impact, as well as financial gain. With an increased global awareness around climate change, and massive inequalities in societies over the world, it isn’t particularly surprising that it’s become more of a priority for investors in the past 10 years. And it’s encouraging that Europe is at the forefront of change.
The research showed that impact investing accounts for over 15% of total European VC investment; that’s a 3x increase when compared to a decade ago, and more than double the global average of 7%. A whopping €6B was invested into European impact startups in 2019. It shows that what was once a fringe investment and innovation activity is becoming a core part of European innovation ecosystems.
UK making an impact
When it comes to the UK specifically, investment into impact startups increased 9.5x between 2014 and 2019. So far in 2020, UK impact tech companies have raised €1.4B, with cleantech and climate tech companies raising the most capital of all UK impact startups.
George Windsor, Head of Insights at Tech Nation, commented: “UK impact tech firms have come on leaps and bounds over the last six years – with nearly 10x more investment made into groundbreaking companies in 2020 than 2014. UK tech must continue to play a key part in tackling some of the world’s toughest challenges, including climate change. This revolution is happening right across the country. Tech Nation is pleased to work with some of the leading companies in this space through our world-first Net Zero programme – ensuring that companies working in this sector can scale to have the greatest impact.”
The biggest rounds for UK impact startups in 2020 can be found here, including Octopus Energy, Arrival, Connexin (Hull), Tokamak Energy (Abingdon), Compass Pathways, Cera, Highview Power, FiveAI (Cambridge), The Meatless Farm Company (Leeds).
Climate tech companies, which includes electric vehicles, have attracted the most investment within the impact sub-sector, with European players emerging as global market leaders. European companies working to tackle climate change and its impacts have attracted €9.8B in VC investment in the last five years.
Introducing the Impact and Innovation database
This comes as Tech Nation and Dealroom launch the Impact and Innovation database, that catalogues 4,939 startups and scaleups, 7,472 funding rounds, and 232 exits of innovative companies addressing the world’s most pressing challenges.
Impact innovation startups are also fueling growth and job creation. Crucially, these startups are actively hiring, the Impact & Innovation database lists over 2,100 jobs in impact startups that are currently hiring – over 390 of these are in the UK.
The Impact and Innovation platform will bring together startups, investors, non-profits, governments, and corporates in one open-access data-driven platform. The new mapping of the global impact and innovation ecosystem will facilitate data-driven policy and decision making, the sharing of cross-industry knowledge, and will foster the partnerships required to help next generation innovators succeed on the global stage.