A staggering $2 trillion funding gap threatens the growth of next-generation climate technologies, especially hardware solutions designed to cut CO₂ emissions. While traditional venture capital leans toward scalable software businesses, hardware-driven decarbonisation efforts often struggle to attract investment. According to COP27, reaching global net-zero emissions by 2050 requires a massive $4 trillion annually by 2030 in renewable energy and decarbonisation technologies. Yet, only 16% of that target is being met today. In response, UK-based climate impact investor Elbow Beach Capital has launched its second fund, unlocking £80 million to supercharge early-stage British startups building breakthrough sustainable energy and decarbonisation technologies.
Elbow Beach Launches £80M Climate Impact Fund 2 with Major Backing
Elbow Beach Capital, a specialist seed investor focused on climate impact, has officially announced the launch and first close of its £80 million Climate Impact Fund 2. So far, the fund has secured £63 million in commitments, including up to £50 million from the British Business Bank via its Enterprise Capital Funds programme.
The fund targets the critical “missing middle” — early-stage UK climate tech startups that have moved beyond seed but still struggle to scale without significant capital. With £40 million ready to deploy immediately, the firm plans to support up to 36 startups over the next four years, fast-tracking their growth, innovation, and global expansion.
Elbow Beach’s investment strategy zeroes in on high-impact technologies solving real-world climate challenges. Areas of focus include automation and AI, carbon capture, electrification, and low-carbon materials. The fund aims to help industries cut emissions, boost efficiency, and lower costs while driving the transition to a net-zero economy.
“We’re looking at technologies that not only benefit the planet but also make strong commercial sense,” explained Jon Pollock, CEO and Managing Partner of Elbow Beach. “Our mission is to nurture founders creating scalable, cost-effective solutions that transform industries.”
One area of particular interest is energy-saving household technologies — innovations that could halve the energy consumption of everyday products like vacuums and dishwashers. Other focus areas include agri-tech robotics and AI-powered solutions that boost crop yields while reducing environmental impact.
Elbow Beach Capital was founded in 2021 by Nick Charman, Jonathan Pollock, and Thomas Hardy — three entrepreneurs united by a deep concern for climate change’s impact on ecosystems and economies. The firm’s name, inspired by Elbow Beach in Bermuda, reflects the founders’ first-hand experience of climate vulnerability on small islands.
Despite being a global climate tech leader, the UK still faces a funding shortfall. British climate startups attract less than half the funding of their US counterparts. Elbow Beach’s goal is to help bridge this equity gap and keep the UK at the forefront of climate innovation.
Elbow Beach offers long-term growth capital ranging from £500,000 to £1.5 million, backing purpose-driven entrepreneurs determined to scale impactful technologies. Every investment aligns with their mission — accelerating decarbonisation and sustainable energy while delivering meaningful social and environmental impact.
Since 2021, Elbow Beach has backed several promising UK climate tech startups through its first £20 million fund. Its growing portfolio includes:
- Munro Vehicles — a Scottish company manufacturing all-electric utility vehicles designed for heavy industries.
- Anaphite — a Bristol-based chemical engineering firm creating energy-efficient EV batteries.
- WASE — another Bristol startup turning wastewater into clean energy.
Beyond funding, Elbow Beach reinforces its impact-driven approach through the Elbow Beach Foundation. Each year, the foundation donates £25,000 to two organisations advancing social or environmental change. Additionally, the company commits 1% of annual net profits to the foundation, extending its mission beyond financial returns.
Christine Hockley, Managing Director and Co-Head of Funds at the British Business Bank, praised Elbow Beach’s strategy, stating:
“We’re proud to support Elbow Beach as they invest in pioneering climate tech startups tackling global challenges. Our Enterprise Capital Funds programme helps lower barriers for emerging fund managers while supporting early-stage businesses. This partnership will fuel the growth of climate impact startups across the UK.”
With this latest fund, Elbow Beach Capital cements its role as a driving force behind UK climate tech startups — helping bridge the funding gap and ensuring British innovation leads the global fight against climate change.
