• UK start-ups, including Marshmallow and Peppy, are building frugal-tech industries in various fields and providing cheap AI-driven insurance and health solutions, while the funding fell by a deep £16.2 billion in 2024. 
• By employing the collaborative use of open-source technologies and partnerships worldwide, these solution providers are truly solving problems through affordable and sustainable ideas, poised for potential recognition at events such as InnoVEX 2025.

The situation they face is a world where tech breakthroughs have rushing price tags for them. A new wave of UK start-ups is, therefore, rewriting the script. They are the innovators of frugal-tech solutions: cheap, accessible, and impactful without crazy prices. Smart AI applications and also green technologies show small companies that pocketing deep enough money is not necessary for a big impact. Let us now jump into how these UK start-ups keep shaking the scene with affordable innovations that are lean and mean.

What Is Frugal Tech, Anyway?

Frugal tech is all about doing more with less. It’s the art of building smart, scalable solutions that solve real-world problems without the hefty costs usually associated with cutting-edge technology. Think of it as the opposite of flashy, overpriced gadgets—frugal tech prioritises practicality and accessibility. As Prof Anil Gupta, who runs the Honeybee Network, puts it, “Frugal innovation is about making solutions affordable, accessible, and available.” And in the UK, where start-up funding took a hit in 2024, dropping to £16.2 billion, this approach is resonating more than ever.

Why Frugal Tech Is Thriving in the UK

With such a large number of start-ups counted in more than 80,000, the ecosystem passes with a certain buzz, limitations being continuously pushed. Economic uncertainty, on the other hand, with the 35% layoffs of VC funds in 2022, has forced founders to even more creative ways. The outcome has been a rise in so-called frugal tech companies, lean and agile, whose paramount concern is to deliver value. Health tech and green solutions, among others, are proving that innovation need not be costly.

Take the example of global frugal tech pioneers like MittiCool in India, whose £76 clay fridge is now sold in the UK, showing how low-cost materials can meet everyday needs. A lot of start-ups in the United Kingdom take note, going local with innovation and global in outlook to make things cheap and exportable.

UK Start-Ups Leading the Charge

1. Marshmallow: Affordable Insurance for All

London-based Marshmallow is a shining example of frugal tech in action. This insurtech company uses data science to sell car insurance to underserved groups like immigrants, who are often overcharged or ignored by traditional providers. By maintaining a lean tech stack with an AI-driven approach, Marshmallow can deliver policies much cheaper. In 2025, they raised £71 million at a valuation exceeding £1.6 billion, showing that frugal doesn’t mean small-scale. As Devon Kirk from Portage Capital Solutions says, “We think that financial services benefit from different perspectives and leaders coming up with innovative solutions to address those needs.”

2. Peppy: Health Tech That Cares

From the health tech currents, Peppy rises as a digital platform that offers menopause, fertility, and mental wellbeing support. Deeply integrating wearables and ML (Machine Learning), Peppy offers a truly personalised care experience. The huge Series B round of £35 million in 2025 speaks volumes about investor confidence in affordable health. While private healthcare of good quality is usually very expensive, Peppy kept the good quality and gave it an affordable price, thereby serving as a lifeline to those who need it.

3. Green Tech Innovators

The UK’s green tech scene is also getting a frugal makeover. Building on the government’s even bigger £2.5 billion Green Innovation Fund back in 2025, start-ups are putting their minds to climate change issues with inexpensive solutions: battery recycling companies and carbon offset platforms. With open-source technology and some decent teamwork with partners from around the world, the companies keep costs down to ensure that sustainability isn’t considered a premium commodity.

The Challenges: Funding and Brain Drain

Though it seems like the lights are all dazzling for the frugal tech start-ups, their way is littered with obstacles. In the UK, 2024 saw funding ebb to £16.2 billion, the lowest since 2020, forcing a few founders to cast their eyes overseas for cash. According to PoundSterlingLive, a London-based SaaS founder said, “We received more serious term sheets in one month from San Francisco investors than we did in six months of pitching around Shoreditch.” The factor in consideration is that this “brain drain” of talent and capital does present a problem, pronounced so perhaps because some start-ups, such as AI firm Cleo, are already considering going Stateside to better their funding prospects.

Yet, the UK’s frugal tech scene is resilient. By focusing on lean execution and international collaboration, these start-ups are staying competitive. The government’s push for policy reform and funding accessibility, like the Green Innovation Fund, is helping keep the ecosystem vibrant.

Why Frugal Tech Matters

Frugal tech isn’t just about cutting costs—it’s about democratising innovation. By making tech affordable and accessible, these start-ups are solving real problems for real people. Whether it’s a £76 fridge or AI-driven insurance, the focus is on impact over extravagance. As Prof Gupta says, “Many of these innovators don’t have formal education but are solving real-world problems.” In the UK, this ethos is driving a new kind of tech revolution—one that’s inclusive, sustainable, and budget-friendly.

The Future of Frugal Tech in the UK

With AI, green tech, and health tech leading the charge, the UK’s frugal tech start-ups are set to shine in 2025 and beyond. Events like InnoVEX at COMPUTEX 2025, where UK start-ups will showcase alongside global innovators, highlight the country’s growing influence. By embracing open-source tools, strategic partnerships, and a “less is more” mindset, these companies are proving that innovation doesn’t need to cost the earth—literally or figuratively.

So, next time you hear about a flashy new tech launch, spare a thought for the UK’s frugal tech pioneers. They’re quietly building a future where innovation is for everyone, not just those with deep pockets. And that’s a future worth cheering for.