Sustainable Accelerator 7

Idea

Introduction

Sustainable Ventures has been at the forefront of the UK’s net zero transition since 2011, a role underpinned by our belief that climate change can be solved by facilitating commercial innovation and exceptional entrepreneurialism.

Over the last 12 years we have built the largest climate tech ecosystem in Europe, housing a 100-strong community of start-ups in our workspace in London, providing commercial support and expertise to over 500 companies across the UK and Europe, and 50 pre-seed stage start-ups invested and incubated by the Sustainable Accelerator.

We are now raising SA7 to invest into 8-10 of the UK’s most innovative S/EIS start-ups, each of which will be diligently chosen for their potential to play an outsized role in the net zero transition while simultaneously delivering strong financial returns to investors. We will build a portfolio of differentiated hardware and software technologies across energy, agritech, building tech, mobility and circular economy verticals. The companies we will invest in will all benefit from innovative IP, strong commercial potential and high-quality founder teams, and will also qualify for S/EIS tax relief.*

To date, Sustainable Accelerator has invested and incubated 50 companies (44 direct investments and 6 spin-outs) in areas ranging from material sciences and construction to mobility and energy generation. Our portfolio, which has one of the best in-class success rates, shows the benefits of our ecosystem support approach with 3 exits already closed and over £100m in follow-on funding secured by our companies.

The holistic ecosystem support model that we have developed at Sustainable Ventures means as investors, we are uniquely positioned within the UK’s climate tech sector:
• Our venture development programmes and network of university and innovation agency partners give us considerable access to deal flow and due diligence insights;
• Our tailored support model, which draws on our in-house consultancy expertise across multiple functions such as product design and development, business development, marketing, grant funding and finance helps the founders we back to de-risk technology development;
• Our wider connections with corporates, policy makers and follow-on investors helps those companies get to commercial scale rapidly.

This approach has already proven successful as demonstrated by our previous investments Rovco, Airex and Sunswap which have gone on to achieve valuation uplifts of x41, x14 and 20x respectively.**

Our selection process and portfolio support model has allowed us to become a class leader in climate tech investment with one of the highest portfolio success rates in VC, especially when contrasted with similar S/EIS funds. We attribute this success to the strength of our deal sourcing and support model, selecting only those start-ups that we think can deliver high impact and financial returns. This well trodden process has delivered our investors 3 exits, a combined enterprise value of over £150m and a current portfolio success rate of over 87%.

By supporting our portfolio with this model, we aim to reduce the failure rates and increase returns for our investors.

SA7 aims to build on this success and invest £150k - £350k into a further 8-10 high potential climate tech start-ups . These businesses will benefit from an enhanced 12-month Accelerator support programme including strategic direction, mentorship, network connections, fundraising support and growth services each drawing on expertise from the Sustainable Ventures ecosystem.

Track Record

Since 2011, Sustainable Ventures has invested in and incubated a portfolio of innovative climate tech start-ups, a number of which have attracted significant later stage funding with substantial valuation uplifts. Our position as one of the earliest investors has allowed us to take a more active role in the development of these companies which we believe is a significant factor in their success. We achieved success early on with one of our first companies, E-Car, becoming the UK’s first crowdfunded exit when it was acquired by Europcar within 4 years of inception.

We built on this experience over the last six Sustainable Accelerator cohorts, through which we have directly invested in 44 high growth climate tech start-ups, achieving our most recent exit in 2022 when Zeigo was acquired by Schneider Electric. Sustainable Ventures now has a portfolio of 40 active companies - all of which were S/EIS tax relief eligible at the point of investment.

All of our investments make use of S/EIS tax relief, with a view to maximising SEIS allocation for our investors where possible. Due to the extension and expansion of this scheme in 2023 our qualifying SA7 investors can expect to continue benefiting from this programme.*

The Sustainable Accelerator portfolio is curated to deliver impact and maximise return for our investors, following thousands of hours of sourcing and due diligence:

In the last six years we have sifted through thousands of potential investments to curate a portfolio that has the potential to deliver for our investors, maximise their S/EIS opportunities* and drive us towards a net zero future.

How does Sustainable Accelerator source start-ups?

Sustainable Accelerator benefits from the established start-up support programmes managed by Sustainable Ventures, which provide regular dealflow and strong brand recognition, driving direct approaches from entrepreneurs looking for funding.

Alongside which we have developed strong relationships with many of the industry’s most innovative incubators, universities, research funding bodies and venture capitalists which have exposed us to new prospects and co-investment opportunities. This network, along with the growing presence of Sustainable Ventures in the climate tech community has expanded our reach year on year.

We intend to continue growing this reach with regular pitch events bringing together entrepreneurs and experts in our network to continuously identify new investments and industry trends.

What does Sustainable Accelerator look for?

We look for early stage, S/EIS eligible, UK climate tech start-ups operating across a range of verticals and underlying technologies where we believe disruption is inevitable. We ensure a balanced portfolio of investments is achieved with no significant concentration in any one vertical.

When evaluating opportunities, we predominantly reference the following criteria:

For our programme, we look for high quality teams, early traction, and a disruptive technology or business model. We invest in companies capable of gaining momentum from our investment, and coachable founders willing to leverage the Sustainable Accelerator programme to the fullest.

When companies align with these criteria we find that the programme has the potential to have a significant multiplier effect over just a cash investment.

How our Acceleration Programme strengthens start-ups

We pair an investment of £150k - £350k (from the funds raised via this campaign) with a 12-month accelerator programme, making us more invested and more embedded than the classic accelerator model (which typically lasts three months and offers a very small investment of between e.g. £10-50k).

Our belief is that by spending a full year embedding the experience of our team into our start-ups, providing access to the Sustainable Ventures services and sharing our ready-made industry network, the companies we select will routinely outperform their peers.

Our hypothesis has been proved by the performance of our Sustainable Accelerator companies, which on average have a 85% success rate and valuation uplift of ~3x in their next investment round following the programme**.

The one-year Sustainable Accelerator programme consists of:
• Routine 1-to-1s with our in-house team focused on overcoming challenges faced by early-stage founders.
• Dedicated commercialisation support, including provision of business development resource and market research support.
• Tailored fundraising support, preparation and introductions.
• Access to experienced industry mentors and our readymade industry network.

Our position within Sustainable Ventures allows portfolio companies to gain access to their suite of proprietary growth services during their year-in-residence, including:
• Bid writing (leveraging the significant grant funding available for the sector).
• Bookkeeping (avoiding common early stage mistakes).
• Tax Rebates (leveraging government financial support for innovation).

Alongside this we offer space in our flagship site in Central London, next door to the Sustainable Accelerator team, to all portfolio companies. This residence dynamic means far more than desk space; it means we are available to support the team as and when we are needed, whilst also giving them direct access to other portfolio founders, ecosystem investors and industry stakeholders.

Investment Thesis

Sustainable Accelerator uses a fourfold strategy to maximise the potential of cohort companies

Tax advantages and climate-specific grant initiatives allow us to offer investors some downside protection and make your investment go further.*

Who am I investing alongside?

Whilst we have set our minimum campaign target at £600k, our goal is to raise over £1.5m from investors looking for curated exposure to the climate tech and sustainability space.

Should there be sufficient demand, Sustainable Accelerator would be comfortable overfunding to increase the capital available to invest in new portfolio companies. We would be open to raising up to £3m as we believe there are sufficient high-growth early stage opportunities within climate tech to deploy that capital and expand the potential returns for investors.

Our management team will be investing a minimum of £50k into the Sustainable Accelerator. These funds will be deployed into the cohort companies alongside other funds raised via Seedrs on exactly the same terms, aligning our interests with anyone who joins us via Seedrs.

Over the last six cohorts we have grown our investor base and now receive investment from industry experts, professional investors, engineers, founders and casual investors each passionate about sharing in the returns of early stage climate tech and investing in the future of climate tech.

*UK taxpayers should note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. To learn more about how SEIS or EIS works, please read the online HMRC guidance or contact your professional tax advisor.

** As calculated from company pre-money valuation prior to our first investment to post-money valuation after the most recent round.