Investing is no longer solely about profit. A growing number of investors are choosing companies to back that not only provide financial returns but also have a positive social and environmental impact.
The UK is well-positioned in this area. It is home to 900 impact startups and scaleups using technologies such as AI, blockchain and big data to combat global issues.
A recent report by Dealroom for the UK’s Digital Economy Council found that UK impact tech startups collectively raised £2bn in 2021, reflecting a strong appetite for the UK impact startups and unicorns – privately held companies valued at $1bn or more.
The analysis shows there has been a 127% increase in UK impact tech investment since 2018, which is up from £1.7bn last year.
The UK is currently home to 12 impact unicorns. From electric flying taxis to AI-based drug discovery, UKTN has listed all the key details about the 10 UK impact startups to watch in 2022.
Founder: Denis Sverdlov
Year founded: 2015
Arrival is a London-based Tesla rival that develops and manufactures zero-emission, electric public transportation vehicles such as vans and buses. Back in 2020, the company attained unicorn status and is now valued at $8.2bn (£6.1bn). It bagged $660m (£496m) funding early last year in a round led by strategic partners Hyundai, Kia, UPS, Winter Capital.
Arrival develops software, materials, components, and scalable skateboard platforms and its micro-factories allow them to make vehicles and adapt to any mobility ecosystem. Recently, the company unveiled a new prototype of an electric bus, which is likely to enter into production next year to sell almost at the same price as a conventional diesel bus.
Founder: Greg Jackson
Year founded: 2015
London-based utility supplier Octopus Energy achieved unicorn status in May last year and is valued at over $4.6bn. It was made possible by closing $360m (£270m) funding from Origin Energy, one of Australia’s leading energy companies, which took a 20% stake in Octopus Energy.
Octopus Energy builds technology that reduces the cost of energy, improves customer experience, and paves the way to a cheaper, greener, smarter grid. The company provides an easy, affordable energy option for Great Britain’s businesses.
Founder: Ali Parsa
Year founded: 2013
Babylon, a London-based digital healthcare company, attained unicorn status in 2019 after it raised $500m (£377m) to take its valuation to over $2bn. Now, Babylon has a valuation of $4.2bn as of October 2021 as it secured $200m (£150m) from AlbaCore Capital Group, which is a sustainability-linked investment. Other investors of the company include Kinnevik, Palantir Technologies, Sectoral Asset Management, Swedbank Robur, and VNV Global.
Babylon’s goal is to make high-quality healthcare accessible and affordable for everyone. The company re-engineers the global healthcare market to better align system-wide incentives and to shift the focus from reactive sick care to preventative healthcare, thereby resulting in better member health, improved member experience and reduced costs. Its digital-first platform combined with clinical operations and affiliated provider networks provides an integrated, end-to-end healthcare solution.
Ceres Power Holdings
Founder: Nigel Brandon
Year founded: 2001
Horsham-headquartered impact tech unicorn Ceres Power has a valuation of $2.6bn as of 2013. The company has received investments from Parkwalk Advisors, among others. The company is working towards developing a commercially viable fuel cell, building on 30 years of research by the founder of its technology, Professor Brian Steele.
In October this year, Ceres Power Holdings appointed Eric Lakin as its chief financial officer.
Founder: Stephen Fitzpatrick
Year founded: 2016
Vertical Aerospace, a Bristol-based global aerospace company, raised pocketed $200m (£150m) in additional financing to support its path to scale production and certification of the VA-X4 electric vertical take-off and landing (eVTOL) aircraft. The company received the funds from Mudrick Capital Management, Kouros SA, Vertical’s PIPE alongside American Airlines, Avolon, Honeywell, Microsoft’s M12 and Rolls-Royce.
Vertical Aerospace is building urban air mobility technology that can make air travel personal, on-demand, and carbon-free. Electric air taxis could also reduce congestion on the streets below. In 2019, the company launched its second aircraft called Seraph.
Founder: Simon Beckerman
Year founded: 2011
Depop is a London-based fashion marketplace for buying and selling clothes. The company was acquired by Etsy in June this year and reached a valuation of $1.6bn. It has offices in Manchester, New York, Los Angeles and Australia.
The company has secured investments from General Atlantic. Previous investors HV Holtzbrinck Ventures, Balderton Capital, Creandum, Octopus Ventures, TempoCap and Sebastian Siemiatkowski among others.
Founder: Stephen Fitzpatrick
Year founded: 2008
An independent energy technology company and supplier based in Bristol, Ovo Energy believes the existing energy market is broken and aims to make energy cheaper, greener and simpler.
The unicorn has a valuation of $1.3bn and has picked up investments from Mayfair Equity Partners, and Mitsubishi Corporation.
Founder: Orral Nadjari
Year founded: 2019
London-based Britishvolt is an automation company, which is building the UK’s first giant battery factory in northern England. Its plant will be built in three phases having a total capacity of 30 gigawatt-hours from the end of 2027.
Its production capability will equate to enough cells for around 300,000 electric-vehicle battery packs a year. Also, it will help the company underpin its ambition of achieving net-zero total emissions by 2050. Back in August this year, Britishvolt secured funding from Glencore, NG Bailey and Carbon Transition to give it a valuation of $1bn.
Founders: Adrien Cohen, Alexandre Dalyac, Razvan Ranca
Year founded: 2014
London-based software company Tractable develops AI tools for accident and disaster recovery. Using deep learning to automate visual damage appraisal, Tractable’s AI looks at photos of the damage and predicts repair costs.
The company says its technology can help to settle claims more quickly and efficiently. In June 2021, Tractable pocketed $60m (£45m) from Insight Partners and Georgian. This round took the valuation of the company to $1bn.
Founders: Brent Gutekunst, Ivan Griffin, Ken Mulvany, Michael Brennan
Year founded: 2013
Cambridge-based BenevolentAI aims to deliver life-changing medicines with AI. The company has restructured engineering used in drug discovery and has invented tools to develop new-age treatment procedures for over 8,000 diseases across the globe.
It has a valuation of $1bn, with investment coming from Woodford Investment Management, Lansdowne Partners, Lundbeck, Goldman Sachs and Temasek.