May 31, 2022
Mapping the UK’s low-carbon heating and energy efficiency business landscape
Karlis Kanders
Innovation in low-carbon heating is currently blooming — and some investors are picking up the scent. In 2022, we have already seen net-zero trailblazers Sero Group receive a £5.5 million investment, zero-emission boiler developers Tepeo land a £1 million grant from Innovate UK and Satellite VU attract additional funding to launch a constellation of thermal imaging satellites to monitor energy efficiency at an unprecedented scale.
To help us keep track of the UK businesses operating in the low-carbon heating and energy efficiency space, we’ve compiled a live directory on Airtable, Crunchbase and Dealroom.
The companies on our list — nearly 300 to date — are primarily startups, and were identified through a data-driven analysis as part of Nesta’s Innovation Sweet Spots project, as well as through qualitative research and conversations with our colleagues. These businesses are working on technologies such as heat pumps and heat storage as well as insulation, smart homes and demand side management.
If the UK is to reach its net-zero goal, growth in this sector is vital, as is continued investment and research funding. We hope that this directory can help investors, entrepreneurs and strategists to explore this important part of green tech space.
Why is investment in low-carbon heating important?
Our homes emit around 20% of the UK’s total carbon emissions. To reduce emissions from our households, we rapidly need to make homes more energy efficient and switch to greener heating systems such as heat pumps.
Through Nesta’s sustainable future mission, we are committed to supporting the transition of the country’s 29 million homes to sustainable, low-carbon heating.
Our recent research on green technologies highlighted that venture capital investment into low-carbon heating appears to be lower than expected, when compared to other green technologies.
This is worrying, as venture capital is an important component of the innovation system and helps to grow promising concepts into commercially viable businesses operating at scale.
And low investment in low-carbon heating isn’t unique to the UK. A recent report by PwC noted a similar signal at the global scale, with investment into buildings and construction exhibiting the slowest growth and largest funding gap among all climate tech.
That said, the space is by no means dormant. Quite the opposite. Our research shows that there is a growing body of well-resourced research and development of low-carbon home heating in the UK. Household decarbonisation has seen investments from some large investors such as Legal & General in the UK or Fifth Wall in the US. And pioneering companies are developing new and exciting solutions by leveraging emerging technologies such as robots, drones, digital twins and prefabrication to make our homes greener.
According to PwC, the UK market for low-carbon heating, and particularly for heat pumps, is poised for significant growth — potentially reaching £11 billion by 2030. While there are still challenges to overcome, such as reducing electricity prices and improving business and financing models, low-carbon heating and energy efficiency space holds great potential for growth.
Where can you find the company directory?
The company directory can be found as a
- downloadable spreadsheet on Airtable
- landscape on the business intelligence platform Dealroom
- list on the business intelligence platform Crunchbase.
Airtable contains the names and locations of the companies, as well as links to their websites and profiles on other platforms such as Dealroom and Crunchbase.
Note that we have sourced most of these companies using a semi-automated analysis of the Crunchbase business database, which is primarily focused on startups.
To find out more about each of the Airtable data fields, you can hover over the column names to see a pop up with more information.
Alternatively, you can browse the investment landscape on Crunchbase or Dealroom business platforms. If you have accounts on these platforms, they also allow you to easily find more granular details about the investment deals.
Note that in the Dealroom landscape we have placed each company in one of the categories for the purposes of clarity, whereas in Airtable you will find that a company can belong to more than one technology category.
Reach out to us
Let us know if this directory is useful to you and how it could be made more so.
If you notice that we have missed an interesting company, please do tell us — either in the comments below or through this form on Airtable. Once we’ve reviewed and added your suggestion to the list, we will also be able to update the investment analysis published in our Innovation Sweet Spots report.
What’s next?
Nesta’s Discovery Hub will keep monitoring these companies as part of our horizon scanning efforts and continuing to update our investment analysis.
If you are innovating within this space and are looking for early stage investment, you can apply for funding from Nesta Impact Investments.
Huge thanks to Alex Hook, Kyle Usher, Kevin Wiley and the wider A Sustainable Future team from whom we have learned so much about this space, as well as Laurie Smith, Celia Hannon and Siobhan Chan for help in writing the blog.
