Who, in the name of Mother Earth, is working on Climate Tech?
Remember your childhood tale of the man who killed the goose which was giving him a golden egg every day? Well, it is pretty much the same situation with the world right now, man plundering natural resources recklessly, leading to drastic climate change and food insecurity.
Good news – sustainability is being recognized as a problem area
There is a lot of interest in sustainability. UNSDG is a buzzing topic. Countries have declared net-zero targets. Finland leads the progress, as per the latest UN Scorecard. Large corporates are starting off on ambitious decarbonization projects. Pepsi’s CEO has gone on record to say that sustainability is at the core of everything they do.
Sustainability is attracting innovation – both strong entrepreneurs and capital
A lot of innovation is taking place and there are many great solutions already in place to help businesses decarbonize their operations. There are 3000+ climate tech start-ups in India. More and more climate/sustainability-focused funds are coming up. Even sector/theme agnostic funds are also showing keen interest in climate tech investments
While the climate tech space is getting a lot of attention, given the specialized nature of this sector, there exists very little knowledge and awareness in the ecosystem.
Over the past few months, we have spoken with numerous start-ups solving climate challenges, climate tech funds scouting for the best start-ups to fund, generalist VCs eager to get a pie of the market, climate angel networks passionately and untiringly helping founders in getting their first investor, and corporates looking for the right solutions to meet their decarbonization targets. We aim to share our learnings through a series of posts with the intention of demystifying the clutter surrounding climate tech and helping all the stakeholders make informed decisions.
Sustainability goals give birth to “climate tech” start-ups…
Let’s start with some basic stuff…..
What do we mean by climate tech? – It is the term given to start-ups that are developing products and services that are helping to reduce Green House Gases (GHG) emissions
What type of solutions are we talking about? – these include areas such as renewable energy, low carbon mobility, agri-tech, carbon capture and storage, green hydrogen, nature-based carbon removal, digital solutions for decarbonization, waste management, and circular economy, among other solutions.
Please see below a snapshot of the top climate tech start-ups and their focus areas:
… and these “climate-tech” start-ups are backed by specialised investors
There is a growing list of investors ready to back innovative solutions solving for climate challenges. Currently, sustainability as a theme contributes to 10~15% of PE/VC activity in India. However, this is expected to reach ~40%, as per Benori research.
Here are some of the active climate tech investors we see in India.
Accelerators / Angel networks:
– ClimAct (accelerator by Merak Ventures and Huddle)
– Sustainomy Ventures (coming soon)
Venture Capital Funds:
– Avanaa Capital – one of the more prominent climate tech investors in India with a focus on Energy & Resource Management, Mobility & Supply Chain, Sustainable Agri & Food System
– Ahimsa VC – invests in early-stage startups that are leveraging and inventing new technologies to build better alternatives using plants, cells, and fermentation, for the food and materials sectors.
– Aera VC – invests globally with a focus on climate and frontier markets.
– Blue Ashva Capital – typically invests USD1mn – USD5mn across the waste to value, electric vehicles, clean energy, circular economy, and alternative proteins.
– Capital A – USD10mn fund to invest in electric vehicles and the related ecosystems.
– EV2 ventures – early to pre-series A investments in smart mobility solutions.
– Theia Ventures – seed capital investor in climate tech (renewables, energy efficiency, e-mobility & charging infra, agri) and circular economy businesses
– Transition VC – a new energy-focused fund with an interest in energy transition, e-mobility, green hydrogen, and climate tech.
In addition to the traditional investment options, founders who are still developing their idea at the lab stage should ideally start off by applying for grants or being part of various incubator programs specially designed for taking the ideas from lab to market. IIM CIIEO, Manush labs, Bioriidl, Icreate, Elemental excelerator, Rainmatter foundation are a few excellent starting points for founders looking for incubator support.
In our next post, we will share more about the situation on the ground with real-life experiences from our chats with founders, investors, corporates, and policymakers. There is a lot of talk about climate tech solutions and how this is going to be the next big investment category, however, it is essential to understand what’s beneath the headlines. So, please stay tuned.
{Vineet has previously setup a global ESG data, ratings, and insights business and is currently investing and advising start-ups through his firm Sustainomy Ventures. Sustainability and Climate are his special areas of interest.
Ram has raised money for his start-up, as well as invested in other start-ups. Sustainability and Agriculture are his special areas of interest.}