Europe is emerging as a powerhouse of eco-friendly startups with the amount of money in “net zero” tech companies more than doubling in a year.
Net zero companies in Europe — those who add no incremental greenhouse gases to the atmosphere — raised £2.1bn from venture capital funds last year, a 129% increase on the previous year, according to a new report from Tech Nation.
In comparison, funding in US companies increased just 16% over the same time period and investment in net zero companies in China decreased 30%.
In Germany, Chancellor Angela Merkel has put emission targets at the forefront of the government agenda, and the country saw investment in net zero companies increase 1000% between 2015 and 2019.
Amongst the German companies is Infarm, a Berlin-based startup who develop vertical farming tech. They grow fruit and vegetables in customer facing locations like grocery stores, restaurants, shopping centres and schools, allowing customers to pick the produce themselves.
Like Germany, France has also seen a huge increase in net zero companies — 500% between 2015 and 2019. Parisian company Seabubbles, who build eco-friendly water taxis, has raised £101m in venture capital investment, more than any other net zero company in France.
But it is the UK that has seen the biggest rise in net zero startup investment, which grew to £336m in 2019.
“We’re at a pivotal moment in the global transition to net zero,” said Kevin Bradbury, cofounder of Ember Core, an 100% electric intercity bus operator. “This topic needs to be on everyone’s radar.”
Daniel Burton, the CEO of Wondrwall, which uses AI to create more energy efficient housing, said the goal of net zero will require “not only technological innovation, but progressive public policy and innovative commercial solutions.”
The UK government has just launched a program to grow net zero companies, choosing 30 startups that’ll receive support. Those include Ember Core and Wondrwall, as well as Tepeo, who make decarbonised domestic heating, and Small Robot Company, who develop robot powered arable farming.
Announcing the UK government’s backing of net zero companies today at London Tech Week, business secretary Alok Sharma said the companies are key to reaching the country’s goal of being net zero by 2050.
“Innovative companies like these will help us to create green jobs and build back better as we recover from the coronavirus pandemic,” Sharma said.
The Netherlands has an extensive list of net zero companies, including Lithium Werks, who create large industrial batteries for transportation and energy storage.
Elsewhere in Europe, Swiss net zero company Climeworks are even working to actively reduce the amount of carbon in the atmosphere by developing carbon dioxide removal technology.
The European Union has also made promoting eco-friendly startups a core part of its Horizon Europe initiative, which is a €100bn research and innovation programme to succeed the Horizon 2020 programme which has been running for seven years.
Back in March, the EU announced its first dedicated funding instrument for so called “Green Deal” startups, via the European Innovation Council (EIC). With €300m available to invest, it’s the largest ever funding round from the EIC, and now 64 companies have been selected for funding.
Innovative businesses that could prove they address at least one of the EU’s eight “Green Deal” goals, will be eligible for grants of up to €2.5m and equity investments of up to €15m.