Clean Growth Fund adds institutional backing as Fund II reaches €94.5 million

Clean Growth Fund, the specialist UK ClimateTech VC platform, today announces the second close of its Fund II vehicle, taking total investor commitments to €94.5 million (£81.5 million) – more than halfway towards its €174 million (£150 million) target.

This equips the fund to continue backing Seed to Series A UK companies whose tech has the potential to cut carbon emissions and grow Britain’s green economy, while delivering a target net return on capital of 20% IRR.

The second close is anchored by a €26.1 million (£22.5 million) commitment from Border to Coast’s UK Opportunities Fund. It also includes a further €11.6 million (£10 million) from Strathclyde Pension Fund – which has backed Clean Growth Fund since Fund I – increasing its Fund II commitment to €35 million (£30 million.) They join Islington Pension Fund and East Riding Pension Fund. The pool partnership has combined assets of around €139 billion (£120 billion), representing 18 Local Government Pension Scheme partner funds.

Beverley Gower-Jones OBE, Founder and Managing Partner of Clean Growth Fund, says: “Border to Coast joining Fund II takes us past the halfway mark towards our £150 million target. Increasingly, major institutional investors are looking to UK climate tech for exactly what it offers – strong long-term returns alongside real economic growth right across the country.

“We exist to connect British institutional capital with British innovation – the returns and the impact go hand-in-hand.”

Clean Growth Fund’s second close can be placed among notable continued capital formation among European climate-focused venture managers in 2026.

EU-Startups has reported approximately €660.5 million across a selected group of comparable climate and sustainability-focused fund closes this year, including London-based 2150’s €210 million Fund II, Paris-based SlateVC’s €132 million first close, Copenhagen-based The Footprint Firm’s €76 million fund and Climentum Capital’s €60 million first close, alongside €18 million for VitaminºC and €73 million for Ananda Impact Ventures.

The UK itself has also seen London-based Eka Ventures close a €91.5 million impact fund covering sustainability and decarbonisation.

EU-Startups previously covered Clean Growth Fund in August 2025, when Fund II reached a €56.8 million first close.

“The UK has the world-class universities, the scientific talent, the regulatory framework, and the policy ambition – and its net zero economy is growing more than three times faster than the economy as a whole. That is the opportunity Border to Coast is moving to capture, ahead of the curve. The more capital that gets behind British innovation, the faster it scales into global winners. This is where the growth is, and I’m confident about how much further we can take it,” adds Beverly.

Founded in 2020, Clean Growth Fund was set up to invest in UK-based innovations that significantly reduce greenhouse gas emissions or improve resource efficiency across: power, transport, industry, the built environment, agrifood, and the circular economy.

The VC champions a place-based investment strategy, backing climate innovation from the established science and investment centres of Oxford, Cambridge and London – to emerging hubs found in the regions right across the UK.

Their first fund (Fund I) invested in 19 UK startups on track to abate 27 million tCO2e per year by 2030, equivalent to 1.5x the carbon absorbed by all UK forests.

Fund II aims to back 25 companies and scale them. It has already invested in four startups, across Sheffield, Bristol, Cardiff and London. Today’s second close follows Clean Growth Fund’s successful exit from Rendesco in May 2026.

Lorraine Martin, Investment Manager at Strathclyde Pension Fund, says: “We first invested in Clean Growth Fund because it offered a compelling opportunity to deliver strong long-term returns for our members while backing UK innovation. That thesis has materialised, and our increased commitment to Fund II reflects our continued confidence in the team as well as the scale and strength of the opportunity. This is exactly the kind of productive, homegrown investment we believe can deliver for our members over the long term.”

The post Clean Growth Fund adds institutional backing as Fund II reaches €94.5 million appeared first on EU-Startups.