According to a recent study by the Impact Investors Council (IIC), Climate Collective and Arete Advisors, 120 climate-related tech startups in India have raised over $1.2 billion in funding over the past five years. Given the gravity of the climate change crisis in India, it is imperative for these low-carbon technology-based startups to achieve the goal of net zero transition and this report establishes that these startups are on the cusp of a growth journey.
There has also been a steady increase in funding in this direction. The sector recorded a steady increase in both the size and value of equity deals between 2016 (18 deals, 102 million) and 2019 (58 deals, 506 million), before the fall in 2020 due to the COVID-19 pandemic. done.
Sustainable Mobility played a leading role in the pioneering sector. Then came the contribution of the energy sector. Climate Smart Agriculture, Waste Management and Circular Economy and Environment and Natural Resources are other sub-sections that are slowly beginning to gain momentum in terms of new and innovative business models as well as increased investment.
All these are still in their infancy and need to be brought into the mainstream.
The sector’s share in the total investment flows is only 9% (this includes financial inclusion, health, education and agriculture, etc.). Most of the deals are in their infancy and are small in size. 68% have received initial level funding. At the same time, 83% of transactions are $5 million or less in size. A large number of investors and entrepreneurs believe that the lack of patient capital investment is one of the biggest weaknesses in the current system.