Global Investment in Climate Tech Continues to Grow, with London Amongst Top Global Innovation Hubs

Discover why London is amongst the top global innovation hubs driving forward climate tech growth, and the startups and initiatives at the forefront of tackling climate change.

4 mins read

Climate change is a global challenge that has led to the development of the climate tech sector. In the past five years, global venture capital investment in climate tech companies has increased by 83%, reaching a total of $171.1bn raised since 2018. Leading international technology hubs such as London and San Francisco are playing a key role in driving the growth of the climate tech sector. London in particular is home to a large number of climate tech companies, talent, and specialist VC funds. It has seen significant growth in investment into climate tech over the past few years, experiencing a 672% growth from $220m in 2018 to $1.7 bn in 2022.

Europe as a region has attracted a total of $44bn in climate tech investment since 2018, reflecting a growth of over 485%. In fact, while overall VC funding into European tech experienced a decline in 2022, investment into European climate tech companies grew by 11% from 2021 to 2022, from $14.3bn to $15.8bn. San Francisco leads climate tech funding with $17.2bn of investment since 2018, followed by London ($5.63bn), New York ($4.4bn), and Paris ($3.9bn).

London is a leading centre for investment into sustainability-led start-ups and is home to a thriving tech ecosystem that is leading innovation in tackling climate change. Three main reasons why London is a thriving destination for growth in climate tech include investment opportunities, access to talent, as well as access to numerous growth programmes and initiatives. London is currently home to the second most climate start-ups, behind the Bay Area and ahead of New York.

VC Investors

London is also home to a high concentration of dedicated climate tech VC funds, providing companies with easy access to growth capital. In the past few years, there has been a surge of new climate tech funds opening in the UK capital. In 2022, the city saw 104 successful rounds into climate tech spanning various sub-sectors, including finance, urban and waste. Notable VC funds in London include Lightrock, which announced its climate impact fund had reached around $900m, and 2150, which backs entrepreneurs tackling climate change in the urban environment, and recently announced its fund had hit the $312m mark.

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Green Finance

Green finance has an important role to play in incentivising consumers and businesses to make more sustainable investments. As one of the world’s leading financial service centres, London is home to many companies in this area. In fact, London recently ranked as the number one Green Financial Centre in the world, according to a report from Z/Yen. Companies such as Zeti, a London-based FinTech platform, sit at the intersection of fintech, mobility, and sustainability, facilitating pay-per-mile financing for zero or ultra-low emissions vehicles. Clim8 is another example of a platform providing a simpler way of investing into a targeted portfolio of funds that are already making an impact in tackling climate change, covering clean energy, clean technology, sustainable food, smart mobility, and recycling.

Urban Tech and Clean Energy

London has set an ambitious target to become a net zero carbon city by 2030, which includes creating change in the way people live and occupy space in cities. The UK capital is supporting the growth of urban tech and clean energy start-ups in this area. This includes Zenobe, a company that designs, finances, builds, and operates innovative battery solutions capturing renewable energy and balancing its supply on the grid and transporting it to electric vehicles. Solivus is another London-based company dedicated to reducing reliance on non-renewable energy sources by making cost-efficient energy and storage more widely available. Companies like Cities Forum work with cities, companies, and organizations around the world to address and solve their urban and sustainable development challenges more efficiently. Meanwhile, the Sustainability Group (Future Plus), a sustainability management and ESG reporting platform, allows organizations to gain a detailed view of their sustainability in terms of historical performance and their future ambition.

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Circular Economy and Waste

Waste is also a significant challenge when it comes to tackling climate change, and London has set a target to become a zero waste city by 2050. Companies such as Olio and Backmarket, amongst many others, are challenging consumers to rethink how they dispose of refuse and items that they no longer need. Olio is a platform that looks to empower local communities and businesses to reduce food waste by connecting them to each other, while Backmarket is establishing itself as the go-to platform for refurbished devices.

Looking Forward

The growth of the climate tech sector and the resilience of its investment and start-up growth demonstrate the importance of developing solutions to tackle climate change. London and other leading international technology hubs are playing a crucial role in driving the growth of the sector. As a region, Europe has attracted a significant amount of climate tech investment, reflecting a growth of over 485% since 2018. This indicates that climate tech is a crucial sector to invest in for a more sustainable future.

The success of climate tech is also reflected in the growth of impact tech. Global investment into impact tech has grown by 81% over the last five years, with a total of $227.9bn invested worldwide. As a region, Europe has seen a 316% growth in this area from $5bn in 2018 to $20.8bn in 2022. This demonstrates the increasing demand for sustainable and impactful solutions.


The climate tech sector is a crucial area of innovation for the future of our planet, and global investment in this sector remains resilient despite a challenging economic climate. Leading international technology hubs such as London and San Francisco are playing a key role in driving forward the growth of the sector. London is home to a thriving tech ecosystem, with numerous growth programs and initiatives, dedicated climate tech VC funds, and a high concentration of climate start-ups. The city is also leading the way in urban tech, clean energy, and circular economy and waste solutions. With its ambitious target to become a net zero carbon city by 2030, London is well-positioned to attract the most global investment and talent for many years to come.

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 London  New York  San Francisco Paris  
2018 $220m $402m $3.7b $348m 
2019 $312m $494m $2.0b $302m 
2020 $1.4bn $358m $962mn $764m 
2021 $2.0bn $1.8bn $5.2bn $1.0bn 
2022 $1.7bn $1.3billion $5.3 bn $2.4 billion 
Climate tech total VC funding over the past 5 years (2018-2022) – City Comparisons
 Global  Europe US UK 
2018 $25.2b $2.7b $13.6b $674m 
2019 $21.2b $4.5b $10.8b $913m 
2020 $23.3b $6.7b $12.6b $1.7b 
2021 $55.1b $14.3b $30.8b $2.6b 
2022 $46.2b $15.8b $22.5b $3.3b 
Climate tech total VC funding over the past 5 years (2018-2022)  – Regional Comparisons  
 Global  London  New York San Francisco  
2018 $32.7b $557m $774m $4.7b 
2019 $30.9b $1.3b $1.0b $2.8b 
2020 $31.3b $2.0b $1.4b $1.6b 
2021 $73.8b $2.6 $4.5b $7.5b 
2022 $59.2b $2.3b $2.2b $5.8b 
Impact tech total VC funding over the past 5 years (2018-2022)

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