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Climate Tech Startups In India Attract Increasing Venture Capital Backing

Updated: May 20, 2024 02:29:39pm

Climate Tech Startups In India Attract Increasing Venture Capital Backing

New Delhi, May 20 (KNN) Venture capitalists are increasingly backing Indian climate technology startups, particularly in the early stages, driven by supportive government policies and a growing consumer base embracing sustainable solutions.

Major investors, including Blume Ventures, Leo Capital, and newcomers like Synapses, have stepped up their climate-focused investments over the past 12-15 months, reported ET.

In March, Leo Capital led a USD 3 million funding round in carbon emission management startup Sprih. Last month, IIT alumni Ruchira Shukla and Karthik Chandrasekar launched Synapses, a VC firm aiming to raise USD 125 million for its inaugural climate tech and health tech fund.

According to Venture Intelligence data, Indian climate tech startups raised nearly USD 157 million across 52 deals in 2023, followed by USD 45 million through 12 transactions in the first four months of 2024.

Prominent global investor RTP Global, which closed a USD 1 billion fund last year, has backed three climate tech startups, including leading an USD 8.7 million round in Varaha, which helps offset greenhouse gas emissions.

Investors are optimistic about the sector's growth prospects, fuelled by maturing technologies, increasing research and development capabilities, and the government's push toward a green energy transition.

Regulatory interventions, such as the Securities and Exchange Board of India's (SEBI) mandated Business Responsibility and Sustainability Reporting (BRSR) for top companies, are also creating significant opportunities for climate tech solutions.

"There is a tremendous opportunity from a pure financial standpoint, as these issues have to be addressed," said Ravi Srivastava, partner at Leo Capital, citing the growing demand for climate tech solutions as companies align with new sustainability standards.

Investors are exploring various sub-sectors, including green hydrogen, battery chemistry, sustainable packaging, circular economy, and sustainable mobility.

Venture debt firm Stride Ventures, which recently closed its third fund at USD 165 million, plans to focus on clean tech alongside consumer and financial services sectors.

As the global shift toward sustainability gains momentum, India's climate tech ecosystem is poised to attract significant investment, driven by favourable market conditions, regulatory tailwinds, and the potential for innovative solutions to address pressing environmental challenges.

(KNN Bureau)


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