The fund, which has secured commitments for £63m of capital, aims to support UK startups in providing solutions to big industry problems, at the intersection of efficiency gain and climate impact, helping industries in efficiently and cost-effectively transitioning to low carbon emissions.

With £40m of immediately deployable capital, Elbow Beach has activated the fund which aims to support up to 36 early-stage British startups over the next four years.

The fund’s strategy includes investment in automation and AI, carbon capture, electrification, and low-carbon materials — it will primarily seek to back climate tech companies, including university spinouts and companies that have received Innovate UK grant funding.

British Business Bank’s Enterprise Capital Funds programme has backed 47 funds, representing more than £2.3bn of finance and helps those fund managers specifically targeting early-stage businesses with long-term growth potential.

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Christine Hockley, managing director and co-head of funds at British Business Bank, said: “We are pleased to make this commitment to Elbow Beach as they back startups pioneering technology solutions to global climate challenges.

“Our Enterprise Capital Funds programme is key in helping to develop and maintain effective venture capital provision in the UK, lowering the barriers to entry for emerging fund managers.

“Our commitment to Elbow Beach builds on the programme’s track record and will help early-stage founders in the climate impact sector across the UK to build their businesses.”

Jon Pollock, CEO and managing partner at Elbow Beach added: “We’re really looking forward to working with the British Business Bank’s team to deploy this fund and partner with brilliant entrepreneurs providing customers with better, more cost-effective solutions at scale.

“The backing from the British Business Bank is a real vote of confidence in Elbow Beach’s investment strategy and in Britain’s entrepreneurs.”