Elbow Beach Capital is an early-stage climate tech investor in the UK. It takes equity stakes from £0.5m to £1.5m in hardware companies. Its portfolio includes a broccoli-harvesting robot, an electric 4x4 SUV built entirely in the UK and a battery company changing the way cathodes are made.
Mewburn Ellis asks him about his fund’s investment methodology, how the UK can become a world leader in battery tech and why the best greentech needs to win without green premiums.
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Tom Hardy is Co-Founder and Chief Technical Officer at Elbow Beach Capital.
Tom, your portfolio spans such a range of technologies – everything from agricultural robots to breakthrough batteries. How do you wrap your head around it all?
That’s one of the reasons we started Elbow Beach. We’re incredibly passionate about supporting UK startups, especially in climate tech. Our mission is to reduce, remove or prevent CO₂ emissions by investing in transformative technologies. These are often complex ideas developed by world-class engineers and scientists here in the UK. What they need from us isn’t just money: they need guidance, whether in commercialising their tech, navigating intellectual property issues or scaling their business.
We focus on hardware because we believe real environmental impact requires tangible solutions. There are some very interesting software plays, but we invest in things that would hurt if you dropped them on your foot.
Can you share some of your favourite Elbow Beach investments?
It’s like picking between children, but here are two that stand out.
First, UPP, which has developed robots for broccoli harvesting, a task that’s traditionally labour intensive and costly. Its technology not only automates this process, but also creates alternative protein products from otherwise wasted crops, which can be used in products from veggie burgers to hair care. Farmers can reduce costs and increase production because they know they can harvest everything they grow. They’re using machine learning to make broccoli harvesting very, very efficient. This makes it economic to make new products based on broccoli.
Second, Anaphite, which focuses on reducing battery manufacturing costs. It produces a carbon nanotube and enhanced composite cathodes. Instead of chasing incremental performance improvements in the battery, it targets cost efficiencies, which is critical for scaling electric vehicle (EV) production. The standard process for making a 1kWh cell requires 6kWh of energy. Anaphite’s method cuts this to just 1kWh, which is game-changing. It is a spin-out from the University of Bristol and it has just closed a $13.7m Series A.
How do you discover startups to invest in? Are they referred to you or do you actively seek them out?
As a scientist by training, I know you can’t just sit back and wait for great ideas to come to you. We actively map out sectors, looking for pain points or bottlenecks where technology can drive change. Take batteries, for instance. We analyse the full value chain, from raw materials coming out of the ground to finished EVs, and identify areas with high costs or inefficiencies. What are the problems in the industry? Where is there a really high energy bill? Where could technology save a significant amount on the bottom line?
Then we seek out the best companies tackling those challenges globally. We only invest in the UK, but we benchmark globally. We look for technology at around TRL 4. By mapping out a sector and taking an active approach, we find the best technologies for a problem, rather than passively waiting for an entrepreneur to come to us.
We also leverage our networks, which span incubators, university spin-outs and industry contacts. The whole team at Elbow Beach have over 100 years of experience, which helps us tap into centres of excellence across the UK.
You mentioned a focus on TRL 4. What does it mean?
TRL stands for Technology Readiness Level, a scale developed by NASA. It gauges how ready a technology is for the market. TRL 4, specifically, refers to something demonstrable in a lab – it works, but hasn’t been scaled or deployed to customers yet. It is a well-known concept in the hardware world. That’s what we like to support.
Entrepreneurs often assume VCs merely write checks and step back. How involved is Elbow Beach after you invest?
We’re very hands-on, especially in the early stages. Each company is different, so we tailor our involvement. When things aren’t broken we don’t fix them, but we’re always ready to help founders with planning, team building and securing commercial traction. For instance, we ensure that the technology development journey aligns with the commercialisation journey, so you don’t end up with great solutions looking for a problem.
It’s peaks and troughs. During funding rounds, for example, we’re heavily involved because that’s in everyone’s interest. But our support is always there, whether it’s fine-tuning a pitch or strategising for market entry.
It is your role to assess a company’s environmental impact. How do you actually do this?
We take each business and do a thorough due diligence, which includes analysis using our proprietary climate impact assessment tool, SCALE. First, we analyse how the company’s solution disrupts the business-as-usual scenario, both technically and environmentally. We can then project the potential impact based on the company’s five-year business plan, benchmarking these numbers against early-stage data. We can then work backwards, looking at the potential number of units sold, and examining what happens with business as usual. That gives you a guide as to the impact a technology can have in industry.
For deep technical due diligence, we rely on our network of experts, ensuring we’re backed by the best minds in the field. This is particularly useful in a deep tech solution. Our goal is to understand not just the potential of the technology, but also its market fit and what the opportunities there are for it to be deployed at scale.
Let’s talk about the UK greentech scene. The UK produces brilliant research, yet it struggles to build billion-pound companies like Silicon Valley does. Why do you think that is?
First, I’d highlight that per capita, the UK leads the world in climate tech startups, even outpacing the US by a factor of two. That’s because we’ve got some of the best universities in the world and we’ve got brains being nurtured. I think the delta between the UK and US is the reticence to build businesses out of universities. There are issues in terms of IP and spin-outs.
Additionally, UK scientists and engineers, while brilliant in their fields, often lack commercial acumen: they’ve spent decades mastering their discipline, not running companies. That’s where we can help. At Elbow Beach, we help bridge that gap by guiding these founders on the commercialisation journey.
Is there a trade-off between ESG [environmental, social and governance] goals and profitability?
Not in our view. Impact and profit are intrinsically linked. The important thing for us is impact at scale. It’s not good having the best carbon-reducing technology in the world if you are only selling five units.
We look for solutions that offer both cost reductions and environmental benefits – what I call ‘better, faster, cheaper’. I fundamentally believe that solutions have to show those benefits. We don’t assume customers will go for something just because it’s green. It’s about making money. So our investments need to deliver a cost reduction or performance increase, as well as an impact, and do that at scale. Those elements all go together.
With battery maker Northvolt running into trouble, it seems the UK has a strong research base for batteries, but still struggles to produce at scale. What should our strategy be?
It is an interesting question. I was on a panel at the Faraday Battery Challenge recently having this discussion. The UK is great at battery technology. We are brilliant at R&D. If we doubled down, we could become the lead in that realm. What we don’t have is lots of gigafactories for a variety of reasons, both political and geographic, but I don’t think we should be worried by that. If we are the R&D centre, we need to be making technologies that reduce the cost of battery production, which will incentivise companies to come to the UK and help us become cathode manufacturers and build the manufacturing capacity the UK government wants to see. It’s about making ourselves attractive for companies to come to the UK and start that process.
How can the UK improve the wider climate tech scene?
The UK has a unique opportunity, thanks to its research strength and early-stage networks. We have geographic diversity. The vast majority of our investments are outside London. To develop hardware, you need lab space and factory space, and those are more affordable outside London.
The biggest opportunity for improving the climate tech scene, and taking advantage of this national opportunity, is for more capital, supportive government policies and greater focus on entrepreneurial skills. Elbow Beach is working hard on all these areas.
Thank you, Tom!
Thanks, Charles. It’s been a pleasure discussing this. Supporting these transformative technologies is what we’re here for!
Fostering global success
Eleanor Maciver, Partner, Patent Attorney and Sustainability Champion at Mewburn Ellis, comments:
"In this second instalment of our greentech VC interview series, Tom discusses the critical role of intellectual property, commercial strategy, and scalability in turning greentech innovations into thriving businesses. While the UK leads in greentech research, scaling startups remains a challenge due to IP complexities, funding shortages, and commercialisation barriers. To foster global success, the sector needs greater investment, supportive policies, and stronger business mentorship."
Written by Charles Orton-Jones
