UK 'impact' startups raised £2 billion in 2021

UK startups founded to build sustainable solutions to global problems have raised £2 billion of investment in 2021, according to figures from Dealroom.

So called 'impact' startups that aim to tackle United Nations Sustainable Development Goals have seen a 127% investment increase since 2018.

The findings come ahead of the government's Future Tech Forum which starts in London this week. The two day event will have a particular focus on how technology can deliver positive global change and deliver some of the government's targets agreed by nations at COP26.

Impact investing has come a long way since its start in the late 90s when it was considered more of a philanthropic endeavour, according to Luisa Alemany, associate professor of management practice in strategy and entrepreneurship at London Business School's Institute of Entrepreneurship and Private Capital.

The mood towards impact startups changed, she said, when investors realised these investments could deliver not only a social benefit but also a financial return.

"At the heart of this is technology, as the way to scale social impact is by applying science and technology," Alemany said.

"From biotech to nanotech, cleantech, computer science and medicine, technology is not only improving our lives but finding solutions to these pressing problems that only entrepreneurs, with the right source of financing, can dare to solve."

The UK is now home to 12 impact unicorns, with six based outside of London: ITM Power from Sheffield, Ceres Power Holdings in Horsham, Bristol-based Vertical Aerospace and Ovo Energy .Britishvolt from Bath and BeneveolentAI in Cambridge. Arrival, Octopus Energy, Babylon, Compass Pathway, Depop and Tractable are all based in the capital.

What's more, there are now 22 impact "futurecorns", which are companies on track to reach unicorn status within the next few years.