Energy tech startups look for a “late-stage” financial boost to grow
Energy tech startups – With the UK in a race against time to meet its ambitious objective of net zero emissions by 2050, there has never been a more critical time to embrace innovation to achieve this aim.
However, according to a new analysis, while tech entrepreneurs’ pioneering ideas and groundwork to address the climate catastrophe have been warmly embraced, there is a paucity of finance after the first kickstarting period for the technology to mature and scale up to the level required to elicit change.
Experts at Harwell, the UK’s largest science and innovation campus, are pushing for more ‘later stage’ investment and wiser assistance for expanding energy tech companies as a result of the study’s results.
Harwell has launched its 2022 Emerging Energy Tech Report with Tech Nation, the national network for tech entrepreneurs, which indicated it was 200 per cent harder for energy tech businesses to transition to late growth, compared to tech startups in other industries. As a result, nearly half of UK energy innovation startups are stuck at the seed stage, with limited room to grow.
While the energy technology sector saw unprecedented growth in global investment last year (at $22.2 billion, up from $9.9 billion in 2020), the report highlighted the difficulties that innovative energy tech companies face in thriving and evolving due to the complex technical, political, legal, and financial issues that come with scaling up.
Energy tech startups
“We anticipate that VCs may provide up to half of this funding to help potential energy sector scaleups and products grow faster, with the remainder coming from other institutional investors.” It’s critical that, in addition to this fresh funding, we keep working to strengthen the UK’s innovation climate so that more clean energy businesses can thrive.
“Because of the intrinsic challenge of bringing innovations from the lab into the energy grid, failure to acquire later-stage financing is all too prevalent for scaling energy tech startups.” More cross-sector and cross-disciplinary collaboration and coordination is required to support this emerging sector, as well as for the UK to achieve net-zero energy by 2050.”
“There is the most enormous amount of innovation in, and investment into, cleantech at the moment,” said Kitty Grubb, Senior AgriTech Consultant for Acre’s Sustainable Business Team. While the market is flooded with innovative start-ups, we’re finding that later-stage IT companies are more difficult to find due to a lack of legacy. Perhaps what we need is a more structured approach to what the future of technology, which will only expand in scope, should look like through partnerships and collaboration between commercial, public, and third-sector players.”
According to the paper, clustering organisations would make investors feel more secure in financing long-term projects that solve societal problems because of the opportunities that would come organically.
Harwell’s Energy Tech Cluster brings together national institutions like the Faraday Institution, academia, and industry to speed up global innovation. Its Living Laboratory recently launched an autonomous shuttle trial, demonstrating the potential of battery-powered, zero-emission, 5G self-driving vehicles in a real-world setting.
“It’s vitally crucial to invest in economically scalable and collaborative ways to ensure we’re making the most difference to the climate emergency,” Dr Barbara Ghinelli, Director of Clusters and Harwell Campus Business Development, UKRI-STFC, stated.
The Faraday Institution and Cambridge CleanTech, two UK partners, have provided targeted testing, introductions to possible end-users, and market knowledge to boost product competition for all three.
“We are pleased to be partnering with the North-West Europe STEPS programme to enable SMEs to exhibit their latest energy storage innovations in a commercially relevant setting,” said Professor Pam Thomas, CEO of the Faraday Institution.
“Another example of the Faraday Institution at Harwell functioning as a facilitator for partnerships between UK business, academia, and funding organisations as a way to commercialising breakthrough research and engineering to maximise economic value,” says the statement.
Read more CSR News on CSR Today.