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Almost half (47%) of climate tech leaders said they could not raise enough funding in the last 12 months, according to a survey conducted by London Tech Week.
Another significant issue facing those in climate tech (29%) was struggling to find suitable talent. The survey of 900 climate tech leaders follows an overall decline in UK tech investment as rising interest rates kicked in and inflation soared.
However, there were positives for climate tech, according to Tessa Clarke, co-founder of circular economy app OLIO, said: “2023 has been a watershed moment for climate tech, because for the first time, investment in climate tech has exceeded investment in fintech.”
“However, this has taken place against the backdrop of an enormous decline in overall VC investment, meaning that far too many climate tech founders are still struggling to access the capital they need.”
Despite the “watershed moment”, investment in the segment dropped 18% from the year prior. Most climate tech funding came from VCs, accounting for just over a fifth of investments.
Among the UK climate tech companies to secure funds last year are BeZero, Patch and Carbon RE.
Out of all UK tech investment that was deployed in 2022, however, just over a quarter (26.4%) went to climate tech companies.
“This should concern us all, given the scale of the transition we need to undertake in such short time frames,” continued Clarke.
“We also need to see capital going into all areas of the Net Zero revolution, not just the energy transition.”
While funding levels have dropped this year, there have still been notable raises. Among them are the AI-powered sustainability platform Infogrid, which this month secured £72.4m in Series B funding.
Clarke recently spoke to the UKTN Podcast about how the use of a “hyperlocal” consumption model could reduce food waste.