Beverley Gower-Jones, founder and managing partner at the Clean Growth Fund examines LGPS investment opportunities in UK venture capital supporting the energy transition.
Addressing the climate emergency is both the greatest economic opportunity of our time and an existential necessity for humanity. As renewable energy booms across the globe having become cheaper than fossil fuel alternatives, it’s easy to forget that only twenty years ago wind and solar were the preserve of innovative investors who dared to challenge the norms and disrupt the traditional energy business.
But the wholesale transformation of fossil-fuelled economies doesn’t stop with renewables. The International Energy Agency reports that roughly 35% of decarbonisation technologies still need to be commercialised and scaled up if humanity has a hope of reaching net zero. In the UK, the Mansion House reforms, national net zero targets, and LGPS consolidation agenda are driving pension capital into early-stage and UK clean growth sector. Many LGPS investors are now eyeing local, venture, climate solutions that support UK growth. Among them are Strathclyde, Merseyside, and South Yorkshire, all of which have invested in the Clean Growth Fund alongside the UK government.
The Clean Growth Fund isn’t only excellent for local growth but a smart choice for venture capital. As a leading global centre for cleantech innovation, the UK boasts thousands of companies that are commercialising decarbonisation solutions that do everything from improving the energy output of solar farms by digitising fault identification and condition monitoring (Above), to using machine learning to radically reduce carbon emissions and energy costs for process plants (CarbonRe) and producing sustainable, cost-competitive oils and fats solutions – beginning with a palm oil alternative – for food and cosmetic applications (Clean Food Group).
It takes deep sector expertise to pick the most valuable and commercially viable decarbonisation solutions, especially when the companies in urgent need of growth capital have limited track record in the markets. With decades of experience in climate tech and commercialisation consulting, their expertise has empowered the multi-award-winning fund to invest in 19 companies across all stages of growth.
Unique among venture capital funds, our partnership with our sister company, Carbon Limiting Technologies, provides targeted commercial and technical support for our portfolio companies, the payment for which comes out of the fund’s management fee and therefore comes at no extra cost to our portfolio companies. This support can take the form of market research, defining IP strategies, supply chain recommendations, regulatory advice, internationalisation support or building techno-economic models.
As a UK-focused VC, we firmly belief that the government’s significant support for climate tech innovation makes the UK particularly attractive for innovators, resulting in a rich ecosystem for VC investors to support. Unlike most VC funds, which target the classic “golden triangle” of London, Cambridge, and Oxford, we go one step further and look for opportunities across the UK, with each team member assigned a distinct geographical region. Our regional roadshows and continuous engagement with universities mean we are in close contact with thousands of entrepreneurs, scientists, and academics across the country. This means we discover the best investment opportunities, no matter where they are: companies that combine excellent commercial prospects with solutions that will accelerate decarbonisation in both the UK and global PLCs.
Case studies
Founded: January 2020
HQ: Leatherhead
Description: Battery and solar-powered transport refrigeration units to displace diesel in the cold chain
Overview: When CGF first invested, Sunswap had yet to begin trials with their prospective customers. Since then, they have completed successful trials with a broad range of top tier logistics businesses and supermarket chains, building a large order book and delivering their first commercial units to logistics firm DFDS. To scale up production capacity, they completed a £17.3m funding round in August 2024 with participation from ourselves, Barclays, BGF, Shell and Move Energy.
£3m first round press release, investors: CGF, Barclays
£17.3m second round press release, investors: CGF, Barclays, BGF, Shell, Move Energy
Holiferm
Founded: May 2018
HQ: Manchester
Description: Sustainable biochemicals produced using fermentation (University of Manchester spin out)
Overview: When CGF first invested, Holiferm was operating a small pilot plant and delivering samples to prospective customers. Our funding round enabled the business to construct a full-scale commercial biosurfactant plant in Wallasey and deliver joint development agreements with category leading chemical companies. They are now fulfilling large customer orders.
£6.9m round press release, investors: CGF, ICOS Capital, Rhapsody Venture Partners
£17.3m round press release (note: the company changed strategy so has not built a 15ktpa plant with this funding), investors: CGF, Rhapsody Venture Partners
