Elbow Beach, a UK-based climate impact seed investor, has launched its second fund, the £80M Climate Impact Fund 2, securing £63M in commitments, including up to £50M from the British Business Bank’s Enterprise Capital Funds programme.
With £40M available for immediate deployment, the fund aims to support up to 36 early-stage British startups over the next four years, focusing on scaling up, developing, and exporting emerging climate technologies.
Elbow Beach invests in clean technologies that enhance industrial efficiency, targeting sectors such as automation, AI, carbon capture, electrification, and low-carbon materials. CEO Jon Pollock emphasizes the fund’s mission to bridge the UK’s climate tech funding gap and support innovations that offer both environmental and commercial benefits.
Elbow Beach has been investing in early-stage climate tech startups since 2021, supporting companies from pre-seed to Series A and scaleup stages. Its first £20M fund backed firms like Munro Vehicles, Anaphite, and WASE, which focus on EVs, battery efficiency, and wastewater-to-energy solutions, respectively.
The British Business Bank, a key supporter of the new fund, is the UK’s government-backed economic development bank, managing over £17.4B in finance for nearly 64,000 small businesses. The bank plays a vital role in improving access to finance and supporting net-zero initiatives.
So, what’s the deal? Let’s break it down, explore why it matters
The world needs to hit net-zero emissions by 2050 to keep global warming in check. That’s the goal set by the Paris Agreement, and it’s a tall order. According to discussions at COP27 back in 2022, getting there means pouring $4 trillion every single year into renewables and decarbonization tech by 2030.
That’s trillion with a “T”, think of it as stacking $1 bills from here to the moon and back, several times over. Right now, only about 16% of that cash is showing up, leaving a gaping $2 trillion shortfall.
Research from Deloitte Insights backs this up, pointing out that private funding for climate tech, especially the heavy-duty stuff like carbon capture machines or electric vehicle hardware, is seriously lagging.
Why’s that? Well, traditional venture capital loves software, it’s quick to scale, doesn’t need massive factories, and can turn a profit fast. Hardware, though? It’s a different beast.
It takes big upfront investments, years of tinkering, and a lot of patience. That’s where Elbow Beach comes in, targeting what they call the “missing middle”, those early-stage companies that have a great idea but need cash and support to get off the ground.
So, who are these Elbow Beach folks?
Founded in 2021 by Nick Charman, Jonathan Pollard, and Thomas Hardy, they’re a trio who got inspired after seeing climate change hit hard at Bermuda’s Elbow Beach, think rising seas and battered ecosystems.
They’ve already made waves with their first £20 million fund, backing cool startups like Munro Vehicles (rugged electric trucks from Scotland), Anaphite (super-efficient EV batteries from Bristol), and WASE (turning wastewater into power, also Bristol-based).
Now, they’re doubling down with this £80 million fund, and they’ve got £40 million ready to roll out the door right away.
The plan? Support up to 36 British startups over the next four years, focusing on pre-seed to Series A companies, those early dreamers who’ve got a prototype but need help to grow.
They’re betting on tech like automation and AI to make industries leaner, carbon capture to scrub the air clean, electrification to ditch fossil fuels, and low-carbon materials to build a greener world. Each company could snag between £0.5 million and £1.5 million, plus some hands-on guidance to crack their markets.
Jonathan Pollard, Elbow Beach’s CEO, put it plain and simple: “The UK is second only to the US in climate tech startups, but our businesses get less than half the funding American ones do. We’re here to fix that equity gap and keep Britain a global leader. Green tech has to make money, too, we’re backing founders who can deliver smarter, cheaper solutions that scale.”
It’s a practical take: saving the planet’s great, but it’s got to pencil out for customers, too.
Why this matters: The UK’s climate tech edge
Let’s zoom out for a sec. The UK’s got a knack for climate innovation, think wind farms off the coast or cutting-edge research labs. But funding? That’s been a sore spot.
A 2023 report from The World Fund found European climate tech startups, including the UK’s, are starved for cash compared to their US rivals, who rake in billions from Silicon Valley.
Elbow Beach’s fund isn’t just about money, it’s about proving British ideas can compete globally. With £40 million ready to deploy, they’re eyeing tech that could, say, slash energy use in your dishwasher or boost crop yields with robot farmers. Small steps, sure, but they add up.
The British Business Bank’s in on this, too, chipping in up to £50 million through its Enterprise Capital Funds program. That public-private teamwork’s a big deal, it lowers the risk for private investors and signals the government’s serious about climate tech.
So, what kind of tech are we talking about? Elbow Beach’s got its eye on four big areas:
- Automation and AI: Think robots and smart systems that cut energy waste in factories or homes.
- Carbon Capture: Machines that pull CO₂ from the air or smokestacks, pricey to build, but game-changers for emissions.
- Electrification: Swapping gas engines for electric ones, like Munro’s trucks or Anaphite’s batteries.
- Low-Carbon Materials: New ways to make concrete or steel that don’t choke the planet with carbon.
Take Anaphite, for example. They’re tweaking battery chemistry to charge EVs faster and cheaper, imagine plugging in your car for 10 minutes instead of an hour. Or WASE, which turns sewage into biogas, powering plants while cleaning up waste. These aren’t sci-fi dreams, they’re real solutions that need a push to scale.
Elbow Beach isn’t just about profits. They’ve got this Elbow Beach Foundation, donating £25,000 a year to two projects, could be saving coral reefs or training green-tech workers, plus 1% of their yearly profits.
Now, let’s not sugarcoat it, this isn’t a slam dunk. Hardware tech’s risky. It takes time, and there’s no guarantee the market will bite. Plus, £80 million sounds big, but stack it against that $2 trillion gap, and it’s a drop in the bucket.
Still, experts see this as a spark. A 2023 Tech.eu piece warned Europe’s climate tech lead could slip without more funds like this, so Elbow Beach’s move could nudge others, banks, governments, even big corporations, to step up.
Over the next four years, 36 British startups get a lifeline, maybe turning into the next Tesla or Vestas. The UK could cement its spot as a climate tech powerhouse, exporting solutions worldwide. But the real test? Scaling those $4 trillion annual investments globally.
Elbow Beach’s fund is a bold start, showing that smart money and green goals can coexist. As Pollard says, it’s about “efficiency gains and climate impact”—a formula that could just save us all, one startup at a time.
Keep an eye on this, it’s a story that’s just heating up.
