UK Impact Startups Crave Global Influence with £2bn Raise

The year is not over but new analysis by Dealroom for the Digital Economy Council shows that impact investment is up from £1.7 billion last year, and has increased by 127% since 2018.

Impact tech startups in the UK have raised £2 billion in investment in 2021 to deal with such global problems as climate change, health and food insecurity.

While the year is not over, new analysis published today (29 November) by Dealroom for the UK’s Digital Economy Council shows that impact investment in the country is up from £1.7 billion last year, and has increased by 127% since 2018.

These impact tech startups have been founded to build solutions for the United Nations’ Sustainable Development Goals.

The data comes as Digital Secretary Nadine Dorries hosts the Future Tech Forum taking place this week in London, marking the end of the UK’s Presidency of the G7.

The two-day event will be attended by ministers from governments across the world. They will come together with experts from industry, civil society and academia to discuss future public policy issues relating to the development and use of digital technologies.

In particular, they will discuss how technology can deliver global change and deliver some of the targets agreed by nations at the United Nations Climate Change Conference (COP26).

As reported earlier this month, at COP26 the UK Chancellor outlined the government’s plans to make the nation the “first ever Net Zero Aligned Financial Centre”. Rishi Sunak said he wants “better and more consistent” climate data, sovereign green bonds, mandatory sustainability disclosures, and more.

Dorries notes today: “We want to harness the power of technology to make greener, healthier and safer choices.”

The UK is now home to 12 impact unicorns – companies worth over $1 billion (£749.3 million) or more in value. Of the 12 companies, six of them are based outside of London. They are not all related to enterprise technology, but Tractable (London) and BenevolentAI (Cambridge) are certainly relevant.

Tractable’s focus is on using machine learning models to replace human mechanics for damage assessment in the car insurance field. BenevolentAI uses big data and deep learning to discover medicines.

The Digital Economy Council is naturally putting a positive spin on all the data. In the UK, there are now nearly 900 impact startups and scale-ups using technologies such as AI, deep tech, big data and blockchain to develop solutions to take on global problems. From Dundee to Dorset, these companies have a combined worth of £50 billion and have created over 35,000 jobs.

Collectively, climate tech companies make up 65% of the deals in the impact space. Last year, UK climate tech investments made up more than a quarter (28.6%) of all climate tech deals in Europe.

The final word should go to someone with a more pragmatic approach.

Luisa Alemany, Associate Professor of Management Practice in Strategy and Entrepreneurship at London Business School’s Institute of Entrepreneurship and Private Capital, states: “Impact investing has come a long way since its start in the late 90s when it was considered more of a philanthropic endeavour until investors realised these investments could deliver not only a social benefit but also a financial return.”

Antony Peyton
Antony Peyton
Antony Peyton is the Editor of eWeek UK. He has 18 years' journalism and writing experience. His career has taken him to China, Japan and the UK - covering tech, fintech and business. Follow on Twitter @TonyFintech.

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