Cleantech: A Squeaky-Clean Future in Manufacturing and Investment in the UK 



Cleantech is a word that has come up in conversations quite a bit since the rise of ESG and sustainability in investment criteria. The term cleantech – short for clean technology – refers to any products, services, or processes that use renewable materials and energy sources, reduce emissions and waste, and have a minimal impact on the environment. Cleantech aims to provide sustainable solutions to address environmental challenges, promote energy efficiency, and mitigate climate change. 

The term cleantech has its origins in the venture capital (VC) investment community, which began using the term in the late 1990s and early 2000s. It was notably popularised by Nick Parker and Keith Raab, who founded the Cleantech Group in 2002. 

According to a recent UK Attractiveness Survey research paper from EY, Cleantech investments are weighted towards manufacturing projects. This represents an opportunity for the UK’s levelling up agenda, particularly in regions with traditional strengths in manufacturing such as the North and Midlands, with traditional strengths in manufacturing.  

Investors particularly see electric vehicles and battery technology as the top two areas of cleantech growth, followed by a range of other areas such as heat networks, carbon capture, green consumer products and low-carbon housing technologies. 

According to Beauhurst, cleantech deals increased by 17% from 2021 to 2022. Last year, there was a total of 502 fundraisings held by cleantechs. Two of the top three cleantech backers were crowdfunding platforms – or, rather, those using these platforms – with Crowdcube participating in 33 deals and Seedrs in 30. 

The most prolific venture capital (VC) and private equity (PE) last year was North-West-based SFC Capital. Other top backers included Shell Ventures, BGF Growth Capital, and the devolved government fund Scottish Venture Fund. 





Although 19% of investors see cleantech as a major growth driver in the UK, it does lag behind the 35% in Europe. The UK will have to compete hard for investment in these sectors. 

Overall, cleantech represents a diverse and rapidly evolving sector that plays a crucial role in the transition to a more sustainable and environmentally friendly society. It will be imminent that the UK ensures it becomes the developer and manufacturer of the new technology, and not just the deployer to see the full benefits of the growth it is expected to bring. 



By Anusheh Khan on 23/06/2023