Barclays has released a new paper detailing of how the company believes that the new Government can unlock financing for scaling next generation climate tech companies.

The paper highlights the ‘missing middle’ funding challenge inhibiting the success of growth-stage climate technology companies, particularly those at the Series B+ investment stage. Faced with an investor market more acclimatised to software start-ups, climate tech firms can find it challenging to convey their revenue drivers and scale potential, creating a perceived risk/return profile which can prove difficult to overcome, meaning these companies fail to secure the funding needed for their next level of growth.

Scaling Growth-Stage Climate Tech Companies – how can existing UK public finance support for growth-stage climate tech be optimised to bridge the ‘missing middle’ financing gap?, outlines the main obstacles around financing and government support, and details four key recommendations to address them.

Suggestions include the launch of a dedicated climate tech fund, maximising public finance guarantee structures to mobilise public and private capital use and integration with the proposed National Wealth Fund.

Barclays states that it believes that the UK has an opportunity to leapfrog international markets and become a destination of choice for innovative climate technologies, but the Government must address the public and private sector funding challenge, which is currently hindering the ability of growth-stage climate tech firms to scale at pace.

Daniel Hanna, global head of sustainable finance at Barclays, said: “The UK is renowned for its innovation but there is a missing middle of capital holding back successfully scaling viable real economy ideas that can support the transition to net-zero emerging from our institutions, entrepreneurs and universities. Our policy paper Scaling growth-stage climate tech companies suggests four practical steps for the National Wealth Fund and UK public institutions to unlock financing critical to scaling next generation climate tech companies and support the UK becoming a global centre for climate tech.”

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