Clean Growth Fund Secures £81.5m to Back UK Climate Tech Startups

Clean Growth Fund has secured £81.5 million at the second close of its latest venture capital fund, putting it more than halfway towards a £150 million target for investment in the UK's next generation of climate technology companies.

The fund will invest in 25 UK startups at Seed to Series A, backing businesses developing technologies designed to reduce carbon emissions and support the country's transition towards a lower-carbon economy.

The latest close was anchored by a £22.5 million commitment from Border to Coast Pensions Partnership's UK Opportunities Fund, while Strathclyde Pension Fund added a further £10 million to its existing commitment.

For founders, the significance is bigger than another climate fund reaching a funding milestone.

Pension Capital Is Moving Into Climate Tech

Clean Growth Fund's latest raise shows that climate technology is increasingly being viewed as an investment opportunity rather than simply an environmental cause.

Border to Coast manages around £120 billion in combined assets across 18 Local Government Pension Scheme partner funds, giving the fund access to substantial institutional capital.

That matters because climate startups often face a difficult funding journey.

Hardware, energy and industrial technologies can require significantly more capital and longer development periods than conventional software businesses. Having institutional investors willing to provide patient venture capital can therefore make a major difference.

£81.5m for 25 Companies

Clean Growth Fund II has already made four investments across Sheffield, Bristol, Cardiff and London, covering areas including battery technology, food, heavy industry and buildings.

The fund's strategy also extends beyond established startup centres.

Clean Growth Fund says it wants to support emerging regional hubs alongside established innovation centres such as Oxford, Cambridge and London.

That could be particularly important for founders developing technologies linked to universities, industrial clusters and specialist engineering talent outside the capital.

Why This Matters for UK Founders

Clean Growth Fund's first fund invested in 19 UK startups, which the firm says are on track to abate 27 million tonnes of CO₂ equivalent per year by 2030.

The second fund is now targeting another 25 businesses.

For climate founders, that creates a meaningful source of specialist capital at a stage where finding investors who understand both the technology and the commercial timeline can be difficult.

It also sends a wider message to the UK startup ecosystem.

Institutional investors are increasingly looking at climate technology as a route to both financial returns and economic growth.

If more pension capital follows, UK climate startups could have a much stronger funding base for turning promising technologies into commercially viable businesses.

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