UK Cleantech
2023 Progress Report

UK cleantech remained buoyant, but scaleup gap remains.
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Sarah Mackintosh
Cleantech for UK

2023 was a turbulent year for the global economy, with inflation pressures, rising interest rates and large geopolitical shocks all causing uncertainty in the financial markets. Despite this, the UK economy proved more resilient than anticipated, but it is still suffering from high inflation and weak growth.

Venture capital investment into UK cleantech has also remained remarkably buoyant throughout 2023 – reaching £2.6 billion, matching 2021 levels of investment – a small drop-off from 2022.

We also observed a decrease in the number of late-stage deals year-on-year – a number still surpassing the deal number in 2021. Indeed, we continue to see low activity at Series B, and growth equity has slumped to be the least active investment stage in the UK. Series B investment loosely corresponds to the demonstration and first-of-a-kind (FOAK) stages, with a typical deal size of £25-60 million) Projects require significant capital to take a project from pilot phase, to a FOAK and beyond. Here, we observe a notable shortfall of capital.

To crowd in capital for cleantech deployment, clear market signals are needed. Politically, that has to be built on a foundation of stable, predictable policy. 

Regrettably, however, 2023 offered little by way of stability.
The two main political parties have used commitments on climate change to attack each other. Unfortunately, matters such as the Government’s rollback of the ICE phaseout, and the Opposition’s cuts to spending commitments have resulted in lowered ambitions and a confused voter base.

The cleantech community represents an opportunity to revitalise the UK’s industrial economy, and bring jobs and prosperity to all corners of the country. We look to policymakers to support bridging the funding gap that innovators face at the scale-up stage, which currently sees cleantech startups struggle to close Series B rounds and onwards.

With this in mind, Cleantech for UK argues for the following priority actions in 2024:
- Develop a unified funding ladder
- Implement agile regulation
- Ensure equity in the green transition

Executive Summary


2023 closed with £2,3 billion invested in UK cleantech, slumping slightly year-on-year but matching 2021 levels of investments
202 early-stage deals were made, as well as 51 late-stage deals – the latter making up a smaller percentage of the total deal flow than the global average
Whilst we continue to see low activity at Series B, the growth equity stage has slumped to be the least active investment stage in the UK
The UK spent £38.78 per capita on cleantech in2023, compared to the USA spending £43.81 per capita.


The energy and power sector received just over £1 billion of investment in 2023
This is principally due to another large investment of £705 million for Octopus Energy (who also had two big deals in 2022)
Energy and Power was the only sector which saw an increase in investment compared tothe previous year; notably, all other sectors saw a decrease


Forced to comply with the High Court’s ruling that the Government failed to provide sufficient detail on how to deliver emissions cut, a plethora of concretising climate policy documents were published in the early parts of 2023. These outlined the Government’s plan to deliver net zero growth.
Positive signals from policymakers include promises to reform the planning system, more generous R&D tax credits, and permanent full expensing – amongst several other measures
The two main political parties have used commitments on climate change to attack each other, unfortunately leading to rolled-back ambitions and a confused voter base.


Develop a unified funding ladder encompassing blended finance options, a streamlined loan program, an accessible route to apply for financial products, and the mobilisation of institutional capital.
Implement agile regulation that keeps pace with the rapid evolution of cleantech innovation
Ensure equity in the transition to safeguard the livelihoods of workers across the entirety of the UK

Read our 2023 Progress Report

Cleantech VC investment in the UK closed on £2.6 billion, matching 2021 levels but slumping off slightly compared to 2022. This demonstrates the resilience and dedication of the cleantech community, which persevered through inflationary pressures and geopolitical uncertainty.

Furthermore, the UK also saw positive policy signals, but numerous questions remain outstanding. More substantial policy action is likely on hold until after the next General Election. Political turbulence has spurred the main political parties to scale back climate ambitions, resulting in an uncertain investment environment.

Read our full Progress Report to learn more about UK cleantech investments, the year's top deals and newcomers to the cleantech scene, and why 2023 was banner year for the energy and power sector.
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£2,6 billion
Invested in UK Cleantech in 2023

Venture capital investment into UK cleantech remained remarkably buoyant throughout 2023, matching 2021 levels. Similarly, the number of late-stage deals dropped compared to 2022, but outperformed 2021 numbers.

Despite cleantech’s resilience, scale-up funding gap persists

The growth equity stage slumped to the least active stage, representing the struggles cleantech innovators face to commercialise their projects. Indeed, the lack of an easily accessible funding ladder prevents innovative cleantech companies from deploying their tech at scale.
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2023: the year of the power sector

The energy and power sector received just over £1 billion of investment in 2023, representing approximately 40% of the year’s total cleantech investments. This is due in large part to energy supplier Octopus Energy, which secured a £705 million funding round.

The UK in the global cleantech race

Compared to cleantech active economies with a similar population size, the UK performed second only to France. However, the UK is second-to-last in cleantech investment per capita, beating only Germany.
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