Solving The Climate Crisis: One Fund At A Time With India, it becomes that much more imperative to address the climate-change factor. The country is said to contribute close to 8% of global warming and with so much potential to ultimately reduce its carbon footprint.

In today's world, there's been an extremely tech-driven approach to the problems we face every day. From minuscule issues we face personally to immense obstacles the human race faces at large, technology, at least theoretically has shown promise to solve a majority of them.

Among many answers, that further diversify into many more, is the argument to tackle climate change. According to the European Union, climate change affects all regions around the world. Polar ice shields are melting and the sea is rising. In some regions, extreme weather events and rainfall are becoming more common while others are experiencing more extreme heat waves and droughts.

With India, it becomes that much more imperative to address the climate-change factor. The country is said to contribute close to 8% of global warming and with so much potential to ultimately reduce its carbon footprint.

Funds in the right direction

Green Frontier Capital, is known to be one of the country's first funds dedicated to green and sustainable ideas. The firm has invested a sizeable amount of funds in known consumer brands such as BluSmart, Chupps, Electric Pe, etc. Electric mobility has been a major talking point in the area of investing in climate-changing solutions along with battery solutions, drive chain, and charging solutions being the sub-sectors.

Sandiip Bhammer, Founder and Co-Managing Partner of Green Frontier Capital implied that the regulatory changes significantly influence the viability and growth of climate tech startups.

Sandiip Bhammer, Founder and Co-Managing Partner of Green Frontier Capital.

"Supportive policies create an enabling environment for innovation and investment. Incorporating ESG aspects into a business not only aligns with regulatory expectations but also enhances the appeal of companies to investors prioritizing sustainable and responsible investments," he says.

ESG considerations drive better long-term performance and resilience, making these kinds of businesses more attractive to a broader range of investors. Bhammer is of the idea that the sub-sectors within the climate-tech spectrum are the ones to hone into and derive promise from. Its companies like BlueSmart, are set up to revolutionize the transport sector and there are many more within these said subsectors.

He adds, "Advancements in plastic circularity, recycling, waste management, and sustainable lifestyle businesses are expected to be crucial areas for investment, reflecting the evolving needs and regulatory shifts in the industry."

Bhammer explains, "From a funding perspective, we look at the uniqueness and advancement of the businesses being developed and their potential for substantial sustainability and environmental impact. Additionally, financial projections and the startup's ability to attract further investments are crucial indicators of their potential for sustained growth and scalability in the competitive climate change landscape."

Enhancements in battery technology are the need of the hour, specifically, there exists a vast room for improvements in charging time, range, and achieving efficiency thus taking a small step in making the planet a bit more greener.

Government regulations and programs like the FAME, which accelerates EV adoption in India, further, drive innovative solutions like Battery Smart, a business that runs on battery-swapping networks to influence the transit industry.

Sukhmani Bedi, Partner at Orios Venture Partners, and a backer of Battery Smart, says, "Regulations will play a huge part, especially in relatively new industries such as carbon markets, green hydrogen, ESG, etc. The regulations are evolving as the markets are growing."

Sukhmani Bedi, Partner at Orios Venture Partners.

The investors need to recognize that regulatory risk is always existent in this sector and back founders who are nimble and have the hustle, showing the promise to thrive in this changing environment, Sukhmani surmised.

Long-term viability is a factor that investors often look for as a key deciding factor. Vision, the project's demand, and the key problem-solving ability of the idea make climate-tech startups stand out from the others.

Agriculture is a major contributor to greenhouse gas emissions, as much as 24% of the global share according to the Food and Agriculture Organization (FAO). It is also obvious that agriculture and the sector as we know it are crucial for the world's food security. Achieving efficiency in agriculture means less carbon footprint in the end as farming and climate overlap in many aspects. Experts think change is needed, but can only be done using measurable steps.

Omnivore, an agri-focused fund that has invested in tech-based agri startups such as Niqo Robotics aims to make a difference in improving efficiency in farming methods and therefore achieving net-zero goals for the future.

Subhadeep Sanyal, Partner at Omnivore says it is a time to be excited by how companies in the agribusiness space have room for improvement in efficiency largely because of where the country stands at the moment.

Subhadeep Sanyal, Partner at Omnivore.

"India is being seen as a very stable alternate source to China and with high potential. With the help of funds, tech-enabled manufacturing, and asset-light manufacturing, can prove to be very beneficial in the long run", he opines.

The need to step up

Innovative ideas often come from startups, but they lack funding to solve a climate crisis that is relative to the whole planet. In this scenario, backers become extremely important to get behind the innovative ideas that on paper, set out to save the world, but in the future might achieve in doing that.

Indian Angel Network is a network of funds dedicated to early and seed-stage startups in India. Its Co-Founder, Padmaja Ruparel said that solving the climate crisis is in the hands of both governments and the funds themselves. Coming together the two is important, but to step up and match what is happening globally, India has a lot of catching to do.

Padmaja Ruparel, Co-Founder, Indian Angel Network.

For instance, climate-tech startups in India only raised close to $157 million according to Venture Intelligence Data, compared to the $14.6 billion secured by the US counterparts, according to Bloomberg NEF.

She says, "As we look at innovation and as we look at startups because those are the ones who are going to innovate. These are companies that typically don't have collaterals. Debt is not viable. But if we're looking on the other hand, there needs to be something to unleash non-dilutive funding."

Addressing the climate crisis requires a multifaceted approach, combining technological innovation, supportive regulatory frameworks, and strategic investments. Ideas are crucial, but making the funds available keeps the innovation wheel spinning.

The road ahead is challenging, but with the right policies, investments, and collaborative spirit, the vision of a climate-resilient India is well within reach.