Harnessing UK regions as the engines for national economic growth through climate tech (Sustainable Ventures)

Summary

• The UK is the world’s second-largest climate tech ecosystem, with sector startups attracting £15.5 billion across nearly 3,700 deals between 2020 and 2024.p.4
• As of October 2025, over 72,000 people are employed across 3,300 high-growth UK climate tech companies.p.4
• London captured 66% of all UK climate tech investment in 2024, up from 15% in 2015, highlighting a deepening regional funding imbalance.p.4
• Grant funding represents an average of 17% of total external climate tech funding between 2020 and 2024, with 67% flowing to companies outside London.p.13
• AI-related climate tech expanded significantly, accounting for 36% of UK climate tech investment in 2024 compared to 9% in 2021.p.5
• Hardware-focused climate tech companies based in industrial regions secured just 4% of total AI-related climate tech capital in 2024.p.5

Key insights

1. London captured 66% of UK climate tech investment in 2024, compounding the funding challenges for founders in other UK regions.p.4
2. New climate tech company formations slowed from 359 in 2021 to 122 in 2024, as capital consolidated into mature ventures.p.7
3. Seed-stage funding contracted from 40% of total climate tech investment in 2020 to under 15% in 2024.p.12
4. In Wales and the West Midlands, public grants account for 55% and 57% of external capital raised, respectively, compared to 14% in London.p.13
5. Climate tech startups that participated in accelerators reported higher average valuations of £13.2m compared to £12.0m for non-participants.p.14
6. Accelerator attendance rates vary widely by region, reaching 47% in Northern Ireland and 46% in Scotland, but only 21% in Yorkshire and the Humber.p.17
7. The UK captured 22% of global AI-climate tech funding as of end-2024.p.18