How is London thriving as a leading sustainable-tech ecosystem
04 October 2022
From innovative start-ups to high growth companies, London is home to a large family of purpose driven companies focused on tackling climate change and promoting sustainability. With supportive city-led green initiatives, access to high levels of growth funding and a thriving ecosystem for building networks, London has emerged as a top destination to grow and scale a sustainable business.
London is a leading global centre for sustainable tech start-ups. According to a recent report commissioned for London & Partners by Dealroom, London is home to 296 of them, more than anywhere else in the world, other than the Bay Area. London’s boom in this area has been fuelled by the city’s access to high levels of VC funding. In 2021 sustainable tech investment in London surpassed $1billion, with London-based VCs raising over half of all European dedicated sustainable tech funds in the last two years. The potential for further growth in London is exciting, especially considering that the European sustainable tech ecosystem was valued at $100 billion in 2021, double the year before according to Dealroom.
The UK capital is also championing sustainability at a city level, with ambitious targets to reach net zero by 2030. Supportive business initiatives include the Mayor of London’s investment in green projects, work to slash transport emissions as well as reinvigorate the recycling industry with ReLondon, helping to make the city an ideal place to start and scale sustainable business. In addition, the City of London’s recent 2021 Global Green Finance Index (GGFI) named London as the third best global centre for green finance based on public, private and non-profit investment in sustainable development projects.
Key to London’s strength as a centre for sustainable business are the organisations spread across the city that work to drive and consolidate growth. This includes HereEast based at Queen Elizabeth Olympic Park, which over the past decade has become a hub for clean technologies and home to 3,800 innovators and disruptors. Additionally, Mills Fabrica in King’s Cross is a centre of incubation and investment for London’s agrifood and ‘techstyle’ sectors. Supportive hubs like this are crucial to London’s continuing to grow its sustainability credentials over the next few decades.
Furthermore, incubators such as London Cleantech Cluster specialize in supporting renewable and clean energy businesses and technology development. The cluster brings together many cleantech initiatives in London under one umbrella and provides cleantech businesses with access to mentors, office and a like-minded community for entrepreneurs building sustainable energy production alternatives.
London is also home to a collaborative business ecosystem which places sustainability at the forefront. This includes hosting inspirational events such as London Climate Action Week, the Climate Tech Summit and Reuters IMPACT Summit. These events bring together leading experts, companies and policy makers from around the world – helping to further establish vibrant networks and access to dedicated business support for entrepreneurs.
The city’s thriving, green-focused ecosystem covers a range of sub-sectors that span innovation in mobility and transport to disruption in finance and food. Several London-based companies are leading the way and demonstrating why being based in the capital is allowing them to achieve their goals of making the world more sustainable.
Whilst London has something to show for almost every area of the sustainable tech industry, one of the sectors where London has really proved its mettle is clean mobility. A top example is Zenobe Energy, the battery storage disruptor with an expected valuation of £1billion. Headquartered in London and expanding internationally, it is speeding the UK towards net zero with renewable energy and electric vehicles.
Zenobe works closely with British transport, helping London to achieve its pledge of 100% carbon neutral buses by 2034. It does so by providing zero-carbon transport solutions to electric buses in south London. Earlier this year, Zenobe also signed a landmark deal with the National Express, and already powers 25% of the burgeoning UK electric bus market.
London is also home to Enso, which, to counter increased tyre consumption of EV vehicles, manufactures range-extending EV tyres with increased durability. The company launched a pay-per-mile project with electric London taxis this summer to make EV tyres more affordable for London’s taxi drivers, charging them around 1p per mile, with no upfront costs. Like Zenobe, Enso is also running trials with Transport for London, and is working with DPD and the Royal Mail, to increase final-mile sustainability for EV delivery fleets.
London has proven it is a fit for sustainable start-ups both small and large; it is home to two of the three biggest sustainable tech start-ups in Europe by employees – Arrival and Depop. Although London is home to three climate tech unicorns, and six potential unicorns, it isn’t only the big companies flocking to the city; for example, Enso Tyres employs less than 10 people.
London is also home to sustainable tech companies that are reinventing more traditional industries. In the finance sector for instance, Clim8 is an investment app championing sustainable causes.
Choosing to set up in London, Clim8 was only founded in 2019, and already has a £2 million agreement with London’s Channel 4 Ventures, trading equity in its company for exposure. This partnership has cemented the company’s choice to base in London, proving once again that the city offers far more than just its cultural offerings, but also world-class business opportunities for the right, purpose-driven brands.
Also within green finance, German start-up Plan A has just expanded to London. Providing a SaaS platform, Plan A enables leading financial institutions to improve their climate impact by using AI software to manage ESG reporting, ensuring businesses meets with market-specific sustainability regulations. In November of last year, the B Corp certified business closed a series A funding round of $10million.
London has long been passionate about food sustainability and start-ups like Collectiv Food – a sustainable food supplier whose niche is selling high quality food on demand, rather than using a catalogue- amongst many others is testament to this.
The company has zeroed in on optimizing its ‘last delivery mile’ model by having centralized Points of Distribution in underutilized urban spaces in London that are loaded by trucks at night. Collectiv then uses empty space in vehicles and electric cargo bikes for the last leg of the journey. This produces up to 50% less CO2 than traditional methods.
Collectiv Foods is capitalising on London’s fight against food waste, a major part of the Mayor’s London Food Strategy, of which the target is a 20% reduction in food waste per person by 2025. Showing huge growth potential, the brand already works with the likes of Haché Burger and Fresh Fitness Food, gastronomic giants also based in the capital.
Vertical Future, valued at £100 million earlier this year, is also based in London and already managing over 100,000 square metres of vertical farming in the UK alone. The company’s vertical farms are not only cost effective, but mean crops can be grown in drastically reduced spaces closer to their final destinations, for a reduced carbon footprint.
London has the ability to support sustainable tech start-ups on a macro and micro level. The city has high ambitions to become a more sustainable destination, and this means committing to helping make it easier for a company to setup or grow a sustainable business. From financial services and healthcare to hospitality and transport, there is no better place right now to set up a sustainable tech business than the British capital.