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This is a write up of a recent Decarbonisation Leaders Network session, held in November 2025 titled – Scaling-Up: What can we learn from the UK’s scale-up ecosystem? The network convenes monthly, you can find out more about the DLN here.

The journey from laboratory breakthrough to commercial reality represents one of the most challenging phases for deep tech companies. This transition, often called the “valley of death,” requires not just innovative technology but access to specialised facilities, expertise, and partnerships that can de-risk the scaling process.

A recent community discussion hosted by the Decarbonisation Leaders Network highlighted how collaborative infrastructure is helping UK companies navigate this critical phase, particularly in foundational industries like ceramics, metals, glass, and cement manufacturing.

The Scale-Up Challenge in Foundational Industries

Foundational industries face unique challenges when implementing new technologies. Unlike digital solutions that can scale with minimal physical infrastructure, innovations in materials processing and manufacturing require significant capital investment and specialised testing environments. The gap between proving a concept at bench scale and demonstrating viability at industrial scale can be insurmountable for many promising technologies.

However, industry is working together to bridge that gap. The Foundation Industry Sustainability Consortium (FISC) brings together research technology organisations including Glass Futures and the Materials Processing Institute, alongside academic institutions and commercial partners to drive sustainability leadership and cross-sector collaboration to accelerate innovation. This collaborative approach provides innovators with access to pilot-scale facilities that would be prohibitively expensive to build independently.

Alternative Fuels: The Hydrogen Testing Journey

The transition to alternative fuels demonstrates the value of shared scale-up infrastructure. Recent work on hydrogen firing has progressed through multiple stages, from initial feasibility testing through to full-scale demonstrations.

A comprehensive program examined the impact of 20% hydrogen blends in natural gas on various ceramic materials, from engineering bricks and tiles to technical ceramics used in alloy casting. The testing spanned nearly 12 months and worked closely with manufacturers to adapt firing profiles to match production conditions as closely as possible. Results showed that materials consistently met mandated standards or internal specifications, validating the viability of hydrogen blending.

Building on this foundation, subsequent work explored 100% hydrogen firing for sanitary ware production. While the materials fired successfully and met all performance requirements, the program revealed important considerations including higher NOx emissions compared to natural gas firing and increased volumetric fuel consumption in line with theoretical calculations.

Beyond the technical achievements, the work highlighted practical challenges in converting existing assets. Integrating safety assessments, process engineering for burner connections, hydrogen detection equipment, and other safety systems proved complex. There appears to be a gap in the market for consistent end-to-end services that can support companies through asset conversion.

Process Optimisation Through Data Science

Industrial decarbonisation isn’t limited to just fuel switching. Significant energy savings can be achieved through process optimisation, particularly when combining data science with materials processing expertise.

One example from traditional tableware manufacturing illustrates this potential. Kiln carts had been loaded empirically using methods unchanged for decades. Through data modelling, researchers identified an alternative stacking configuration that delivered a 4% energy saving with minimal additional operator effort and zero capital investment. In energy-intensive industries, such improvements can have substantial impact on both costs and emissions.

Scaling Novel Cements and Geopolymers

The cement and concrete sector face particular pressure to decarbonise, given its significant global emissions footprint. Pilot-scale facilities for geopolymer and novel cement production are helping bridge the gap between laboratory development and industrial deployment.

These facilities include vessels capable of handling 200 to 1000 litres, providing the scale needed to validate production processes before full commercial deployment. Open access models allow companies to test their formulations and processes without the capital burden of building dedicated facilities, accelerating the path from concept to market.

Point-of-Use Hydrogen Production

While fuel switching offers one decarbonisation pathway, questions remain about hydrogen supply infrastructure. One innovative approach involves converting natural gas to hydrogen at the point of use through thermal decomposition, producing hydrogen and solid carbon rather than CO2 emissions.

This approach uses approximately 90% less electricity than water electrolysis and can meet low carbon hydrogen standards by keeping emissions below 20 grams of CO2 per megajoule. By leveraging existing natural gas infrastructure, it avoids the need for new pipelines or storage systems while offering significantly lower operational costs than electrolytic hydrogen.

The process offers advantages for sites with limited electrical capacity. A portion of the produced hydrogen can run generators to provide the electricity needed for the conversion process, effectively enabling self-sufficient operation. Additionally, locating production at the point of use allows integration of waste heat recovery, potentially saving 7-8% of steam production energy demand.

The Role of Specialised Infrastructure

The development of this hydrogen production technology illustrates the critical value of specialised scale-up infrastructure. Moving from laboratory proof-of-concept to industrial deployment requires large-scale equipment, professional operational staff, and comprehensive materials analysis capabilities.

Demonstration facilities currently under construction will produce substantial quantities of hydrogen continuously, operating under industrial conditions with integrated heat recovery. These installations provide the evidence needed to build investor confidence and customer trust while addressing the practical challenges of 24/7 operation that cannot be fully explored in laboratory settings.

Access to sites with existing hydrogen handling experience proves particularly valuable. Engineers and safety personnel familiar with hydrogen systems significantly reduce the time and cost associated with developing operational procedures and safety protocols. Rather than developing everything from scratch, innovators can focus on perfecting their core technology while leveraging established expertise in complementary areas.

Skills and Knowledge Transfer

The difficulty of scaling new technologies extends beyond physical infrastructure to human expertise. Developing new skills, safety regimes, and operational procedures simultaneously with novel technology creates compounding risk and complexity.

Collaborative infrastructure provides access to teams who have already solved many of these challenges. This accumulated knowledge accelerates development timelines and reduces costs compared to building internal capabilities from the ground up. For startup companies with limited resources, this knowledge transfer can mean the difference between success and failure.

Looking Forward

The emergence of demand-led innovation approaches marks an evolution in how the UK supports industrial decarbonisation. Rather than purely technology-push models, the focus is shifting toward understanding market needs across sectors including automotive, aerospace, packaging, energy systems, defence, and the built environment.

This market-driven approach takes a holistic view of supply chains and circular economy principles. Changes in one part of a supply chain can create ripple effects elsewhere, and materials at end-of-life often contain value beyond the primary material. Understanding these interconnections allows for more strategic deployment of innovation resources.

The foundation laid through capital investment in research facilities and collaborative programs is now being leveraged to accelerate commercial deployment. For companies navigating the valley of death, access to this ecosystem of specialised facilities, experienced personnel, and collaborative partners provides a viable path forward where solo efforts might falter.

As pressure mounts to decarbonise industry, the ability to rapidly scale and deploy proven technologies becomes increasingly critical. The collaborative infrastructure model demonstrates how strategic public investment combined with private sector engagement can accelerate the transition from innovation to impact.

Take a deeper dive into the subjects in this article at Decarb Connect UK 2026, held in London on 15-16 April.

The below blog is a write up from a Decarbonisation Leaders Network session held as part of London Climate Action Week in June 2025. The themes covered relate to our Innovation and Investment Day, held on Day 2 of Decarb Connect UK 2026. Sessions cover scaling and commercialising breakthrough technologies with start-ups and investors across the capital stack. You can find out more in our agenda.

The evolution from early-stage to Series B investment represents a fundamental shift in investor expectations and company requirements. Understanding this transition is critical for founders planning their growth trajectory.

Shifting Standards of Precision

Early-stage investors don’t expect precision in financial forecasts, spreadsheet projections, or detailed cost structures. What they do demand is precision about what will be de-risked during the investment period. Founders and investors must reach clear agreement on the most important risks to address and how capital will be deployed to systematically eliminate them.

As companies progress through funding rounds, successfully de-risking key aspects of their technology and business model, a fundamental transition occurs in planning and forecasting requirements. Series B investors are starting to demand much more detailed information about go-to-market strategies, customer acquisition costs, sales team structure, and capital deployment plans.

As you move through your funding journey questions become increasingly granular: How will you reach customers? How large does your sales team need to be? Will you use direct sales or indirect channels? Do you have the right people in place? What are the costs associated with each approach? What capital expenditure will be required to generate projected revenue over the fundraising period?

Tech providers are starting to see more and more scrutiny falls on three and four-year projections. Every assumption requires justification, whether customer-based, partner-based, or derived from operational data. The days of general projections are over; Series B investors want to understand why specific numbers appear in specific cells of the financial model.

Establishing the Full Business Vision Early

A recurring theme across successful hardware scale-ups is the importance of establishing early what type of business is being built, and sticking to that vision. Stakeholders need to understand whether they’re building a full-fledged business or creating a niche product or service.

What’s been identified is that the most dangerous trap is attempting to pivot business models mid-journey. When companies face delays at a particular stage and try multiple approaches simultaneously to advance the business, they typically lose focus. This distraction happens more often than founders expect and proves particularly damaging during the critical B and C rounds.

The advice is clear: avoid working in a vacuum. Successful companies demonstrate real market buy-in for each stage, fully vet economic forecasts with external input, and ensure everything is supportable with detail and reality. Companies must account for marketing challenges, engineering hurdles, legal costs, additional testing rounds, and pilot iterations rather than optimistic best-case scenarios.

Staying focused on core objectives and maintaining realistic expectations is critical. The ability to weather uncertainty becomes a core competitive advantage.

The Critical Role of Time in Hardware Scaling

Time emerges as perhaps the single most valuable and critical factor in the hardware scaling equation. While obvious to many, its importance cannot be overstated—particularly in how it affects investor returns.

When raising capital, the time to return on investment or return of capital may be the biggest variable in IRR analysis. Getting a return in year two versus year five represents a drastic change in both the rate of return and the absolute return on invested capital.

Founders often lack accurate impressions of how long transitions actually take. Guiding companies early on these timelines, assessing whether assumptions are conservative or overly aggressive, ultimately determines when capital returns and which deliverables get achieved.

Managing timelines effectively means bringing in the right partners early to avoid unnecessary delays and cost overruns. Having quality specialists manage critical aspects: procurement, engineering partnerships, technical execution and allows founding teams to focus on strategic initiatives and next-phase planning rather than getting mired in operational details.

Building the Right Team for Each Stage

Team composition and capabilities must evolve as organizations grow. The reality is straightforward: seed-stage startups won’t have all the skill sets required for Series B, and Series B teams won’t have everything needed by Series D.

The question becomes how effectively companies can reinforce their teams with appropriate expertise as they scale. This includes process engineers, sales specialists, and organizational structure experts. Beyond adding roles, founder dynamics must evolve appropriately.

A founder who excelled at the seed stage might need to transition to a more financially-oriented leadership role from Series B onward. Understanding what founders want to do, what they’re passionate about, whether they see themselves as future CTOs or can grow into required roles, becomes essential for long-term success.

For growth capital investors, hands-on support often includes strategic introductions to smooth the path and save time. When operating in emerging markets or complex regulatory environments, connecting companies with the right partners, regulators, and service providers can compress development timelines significantly.

Infrastructure Readiness: The Hidden Complexity

Scaling physical infrastructure involves constraints that software companies never encounter. Development timelines stretch longer than anticipated, supply chain issues create bottlenecks, and geopolitical factors add new dimensions of complexity.

Current challenges include navigating tariff environments when supply chains span multiple countries, managing relationships with overseas manufacturers while serving domestic markets, and dealing with procurement challenges for specialized components at commercial volumes.

Ring-fencing timelines, supply chains, and capital expenditure early, with the right constituents both inside the team and external partners, proves essential to avoiding cost creep and unwanted delays. Having strong owner’s engineers or technical partners who can hold all parties accountable becomes one of the best investments for developmental-stage projects.

The common wisdom in venture investing about hardware timelines still holds true: whatever the startup says about timeline and cost, expect it to take twice as long and cost twice as much. Building this reality into planning and investor expectations from the start avoids painful surprises later.

Financing First-of-a-Kind Projects: Creative Approaches

First-of-a-kind projects carry inherent risks from technical, financial, and execution standpoints. They certainly won’t be easy. However, several strategies can improve viability and increase success probability:

Blended Finance Structures

The optimal approach typically combines equity, debt, and grants from public agencies. The right balance ensures projects can be delivered on time, hitting milestones when needed, while maintaining company viability. No single funding source should compromise either speed or financial health.

Strategic Organizational Structures

Structuring first-of-a-kind projects through specific project company entities separate from parent companies can mitigate risks and limit liabilities. These structures provide flexibility to speed up delivery while containing potential issues that arise from experimental deployments.

Innovative Off-Take Agreements

Rather than fixed pricing, successful projects often incorporate flexible or hybrid pricing models. These include floor and ceiling mechanisms for key variables, allowing risk to be balanced between buyer and seller. Volume commitments provide sellers with bankable agreements they can use to finance projects with third parties, while buyers receive preferential terms or equity participation to compensate for early-adopter risk.

Strong Strategic Partnerships

When building without established blueprints, strong and meaningful strategic partnerships become foundational. If foundations are solid, projects have better chances of surviving inevitable valleys of difficulty. Sponsor partners or anchor customers add valuable perspectives and help maintain momentum through challenges.

Companies with compelling narratives find it easier to onboard new players throughout the journey. First-of-a-kind projects are marathons, not sprints: having a strong story that attracts supporters, funding, and partners along the way becomes essential when hurdles inevitably emerge.

The Path to Bankability: Unit Economics and Cash Flow Certainty

From an investor perspective, first-of-a-kind demonstrators must achieve specific financial objectives to unlock subsequent funding rounds.

Proving Unit Economics

Everything centers on unit economics. When someone is going to finance a plant or customers will outlay significant capital, CFOs need to sign off on projects. They demand precision about cost structures, whether per ton of CO2 captured, per unit of product produced, or per megawatt-hour of energy generated.

Getting more precise on operational unit economics and capital costs represents a primary goal for first-of-a-kind demonstrators. Every project will encounter unexpected challenges. The quality of the team’s response to unforeseen issues matters, but equally important is understanding what additional costs these challenges layer in, what proves more difficult than expected, what turns out easier, and where costs can be reduced or processes simplified for future iterations.

Enabling Blended Finance

When approaching debt providers or infrastructure fund investors, their business models depend on annuity streams from assets. Putting in $200 million over three to four years to build assets requires understanding projected cash flows and their reliability. These investors need high degrees of certainty that asset investments will yield predictable cash flows.

First-of-a-kind demonstrators must show, from a financial standpoint, how predictable and certain the cash flows and costs will be when scaling from demonstration to commercial facilities three, four, or ten times larger and more capital-intensive. Getting this right, particularly with strong strategic partners sharing risk, creates bankable projects that can attract infrastructure capital without requiring excessive equity dilution.

Emerging Tools for Risk Transfer

New approaches are developing to address the gap in risk management tools for early commercial projects. Historically, limited insurance options existed for first-of-a-kind or next-of-a-kind projects, meaning high cost of capital and reliance on equity financing. This significantly slows deployment speed and scale.

Efforts are underway to create systems or syndicates of underwriters that could use objective criteria, such as adoption readiness levels from the Department of Energy, to standardize risk assessment. Technology performance insurance packages could then be created that help drive down premiums.

While still early in development, this approach is generating significant interest and appetite across the market. Creating mechanisms for risk transfer beyond traditional equity and debt structures could accelerate deployment substantially.

Key Takeaways for Hardware Climate Tech Founders

Choose demonstration partners strategically. The right partner for first commercial projects can make or break the pathway to scale. Look for partners who bring more than capital: technical expertise, market credibility, and long-term commitment matter most.

Establish early alignment with strategic partners demonstrating real market buy-in. These relationships provide validation, de-risk technology, and open doors to subsequent funding rounds.

Maintain a comprehensive risk register. At seed stage, focus on why the approach will work. By Series B, investors need to understand why it won’t fail. Document objectively what has been de-risked, what actions will further reduce risk, and how mitigation strategies address remaining uncertainties.

Understand you’re passing the baton. Eventually, projects move from startup teams to industrial operators, infrastructure investors, or corporate partners. Stay in the shoes of those who will receive the handoff, from technical, commercial, organizational, and financial standpoints. Understanding their requirements and thresholds for acceptance is essential for successful transitions.

Build realistic timelines with buffers. Account for the unexpected. Marketing challenges, engineering hurdles, legal costs, additional testing rounds, all take longer and cost more than initial estimates suggest.

Invest in world-class partners and team members. Whether owner’s engineers, process specialists, or executive recruiters, spending money on the right expertise saves time and money overall. The most valuable resource is time; protecting it through smart partnerships is worth the investment.

Focus relentlessly on unit economics early. Every demonstrator should generate increasingly precise data about operational costs and capital requirements. This data becomes the foundation for securing infrastructure financing and scaling to commercial deployment.

The Path Forward

Scaling hardware climate technology beyond Series A remains challenging, but increasingly well-mapped. The fundamental drivers: industrial decarbonisation needs, infrastructure upgrade requirements, supply chain security, create enduring opportunities for innovators delivering cost-effective solutions.

Success requires recognizing that hardware follows different rules than software. Longer timelines, heavier capital requirements, more complex partnerships, and staged de-risking strategies define this space. Companies that combine proven technology, clear business models, strong execution capabilities, and appropriate capital partnerships are successfully making the critical transition from pilot to commercial scale.

The climate tech sector is learning to stand on its own merits rather than depending on policy support that can disappear. Companies that solve real problems, deliver measurable value, and build sustainable business models will drive the industrial transformation needed for meaningful decarbonisation.

For founders ready to tackle these challenges, the opportunity remains enormous. The transition from innovation to industrial scale is difficult but navigable. With disciplined execution, strategic partnerships, and the right capital structure, hardware climate technologies can deliver both environmental impact and investor returns, building the infrastructure foundation for a decarbonised economy.

Take a deeper dive into the subjects in this article at Decarb Connect UK 2026, held in London on 15-16 April.