Green Frontier Capital, a US-based venture capital fund specializing in early-stage climate tech startups in India, is betting on these companies to enhance sustainability, not just in India but globally. Recognizing the potential of India’s climate tech startups, the VC firm plans to double down on its activities in India and create a dedicated fund with an estimated size of $100 million. Established in 2021 by Sandiip Bhammer, a seasoned financial services professional, Green Frontier has already invested in 11 Indian startups.
The fund primarily focuses on sectors such as agritech, foodtech, the electric vehicle ecosystem, and sustainable lifestyles. Among the startups in its portfolio are ride-sharing company BluSmart Mobility, Battery Smart Swap Station, charging aggregator ElectricPe, vegan footwear brand Chupps, bioengineered milk producer Zero Cow Factory, and agritech startup Nutrifresh.
Typically, Green Frontier invests at the early stages (seed and Series A) through various routes, including direct investments, partnerships, and investment platforms. Now, it aims to establish a dedicated fund with a size of $100 million and has applied for the necessary licenses.
India is the world’s third-largest emitter of greenhouse gases, after China and the United States, owing to the size of its economy. As climate change has a profound impact on India, climate tech startups are set to play a crucial role in addressing climate challenges, not only within the country but also worldwide.
Bhammer emphasizes the urgent need to combat climate change and points out that the world cannot achieve its net-zero targets without the active participation of India and China. Therefore, Indian climate tech startups will be instrumental in achieving these global objectives.
The rapid pace of urbanization in India has heightened the focus on sustainable practices, particularly in water conservation and pollution control. Climate change also affects agriculture, calling for resilient farming techniques. Increased awareness and commitment to sustainability, especially among the younger generation, are expected to drive more businesses toward adopting sustainable practices.
Green Frontier’s investment strategy aligns with the Sustainable Development Goals (SDGs). Many of its portfolio companies in the EV mobility space have generated substantial positive environmental impact. For example, they have facilitated over 1.5 billion zero-emission kilometers, equivalent to saving over 22 million liters of fuel and reducing carbon dioxide emissions by 400,000 tonnes.
Green Frontier typically invests approximately $0.5 million at the pre-seed stage, $1 million at the seed stage, and $2 million during Series A. It also evaluates a startup’s potential to generate an internal rate of return of 20-25% over six to seven years.
According to Bhammer, Green Frontier has deployed around $30 million to $32 million in India, with the current market value of its investments at approximately $150 million. The VC firm has seen substantial valuation growth in some of its portfolio companies.
Despite the challenges involved in building innovative and scalable climate tech solutions, Bhammer believes that the next 20 years will be climate-focused. Many of the solutions developed in India could have global applicability, particularly in emerging markets.
The funding landscape for climate tech startups remains promising, with global VC funding reaching $70 billion in 2022, an 89% increase from the previous year. Bhammer expects some moderation in funding activity in 2023 but not a significant decline.
In conclusion, Green Frontier Capital is committed to fostering climate tech startups’ growth and their pivotal role in combating climate change in India and across the world.
