The ClimateTech Index 2026
The 2026 ClimateTech Index
Startup Coalition’s third annual ClimateTech Index, produced with data from Beauhurst, tracks the UK’s 1,000 best-funded venture-backed ClimateTech companies. The 2026 edition finds these firms have collectively raised £22bn, are worth a combined £42bn, and employ more than 24,000 people, sitting within a wider UK net zero economy worth £105bn in gross value added and 1.1 million jobs. Annual funds raised by Index firms grew 17% year-on-year between 2024 and 2025, and exits continue to climb, with 118 firms having exited to date.
The Index lands at a fractious political moment: two of the five major Westminster parties have now explicitly stepped back from the 2050 net zero target. Its purpose is to reframe the argument away from obligation and towards economic opportunity, these are revenue-generating businesses creating jobs in every region of the country, not speculative bets.
Energy dominates, but the market is narrow and stuck
Energy accounts for a third of Index firms (328) but roughly half of all capital raised (£10.5bn) and half of all value (£22.4bn), with storage and batteries its single largest thematic cluster. That strength is narrow, however: Octopus alone represents 26% of the sector’s value, and the top ten firms hold 74% of it. The sector is also stuck – 60% of energy firms sit at Series A, and 147 of the 196 Series A firms were founded in 2018 or earlier, evidencing a hardware-led “valley of death” between Series A and B funding.
A new UK strength: decarbonising data centres
A new cohort of ten firms decarbonising data centres has raised £262m combined, with a distinctive UK strength in waste-heat reuse (Deep Green, DataGlow, Heata) alongside efficiency and cooling plays (Iceotope, Vaire Computing). The Index argues data-centre demand can be an asset rather than a threat to decarbonisation – an anchor tenant that makes renewable build-out bankable, and a source of demand-side flexibility against curtailment, which cost billpayers close to £1.5bn in 2025 and is forecast to reach £4-8bn a year by 2030.
Grant funding has collapsed, and failures are at a record high
Grant funding has fallen sharply following the end of the Net Zero Innovation Portfolio (NZIP): from £272m secured in 2023 to £64m in 2025, an 86% fall in the energy sector specifically. This matters because firms that have secured a grant go on to raise 30% more on average than those that haven’t, and NZIP funding is estimated to have pulled in £2.40-£3.60 of private investment for every £1 granted. Meanwhile, firm failures hit record highs in both 2024 (37) and 2025 (38), with 2025’s failures alone having raised a combined £1.3bn before folding.
What this means for UK ClimateTech
The Index is evidence that the UK’s ClimateTech base is real, revenue-generating, and geographically distributed: 63% of firms, 56% of funds raised, and 61% of jobs sit outside London, and 77% of all grant funding has gone to firms outside the capital. That gives the sector a durable, cross-regional economic case – one more resilient to the fraying of the net zero political consensus than a purely values-based argument would be.
But the Index also identifies where UK policy is currently failing this base. The Series A-to-B ceiling shows capital isn’t the constraint for early-stage ClimateTech — market access is: hardware-led energy and data-centre firms cannot convert good technology into deployed infrastructure without demand-side reform, including outcomes-based subsidy, first-of-a-kind procurement, and grid/curtailment markets that allocate capacity on price rather than queue position. The collapse in grant funding since NZIP’s non-renewal looks like a false economy given its demonstrated multiplier effect, and risks starving the next cohort of firms before they reach the point where private capital will back them. Record firm failures, particularly among well-funded firms, suggest the valley of death is now actively costing the UK economically valuable companies and IP, with a real risk that they are acquired overseas rather than scaled domestically. And the data-centre cohort represents a genuine emerging UK strength, particularly in waste-heat reuse, that could be actively grown through co-location and connection policy rather than left to market forces alone.