120 climate-tech start-ups raised $1.2 bn in last 5 years: Report

NEW DELHI: A ground-up study, which puts a spotlight on the investment activity in the Indian climate-tech sector over the past five years, has found that 120 climate-tech start-ups raised $1.2 billion during the period.

There was a sustained growth in both volume and value of equity deals in the sector between 2016 (18 deals worth $102 million) and 2019 (58 deals worth $506 million), before a dip in 2020, owing to the pandemic.

“This shows that a new wave of climate-tech is blooming in India. A total of 120 climate-tech start-ups raised this funding over 200 rounds from 272 unique investors over the past five years,” said a report titled ‘Early-stage Climate-tech Startups in India: Investment Landscape Report 2021’, prepared by the Impact Investors Council (IIC), Climate Collective and Arete Advisors.

Apart from the finance, the second finding of the report is that the sustainable mobility leads the action, followed by energy. Climate-tech is a broad term comprising several sub-segments, of which sustainable mobility (including Electric Vehicle manufacturing, clean logistics and novel components) has seen the highest investment activity (84 deals, $705 million).

It is followed by energy (including clean energy generation from new feedstocks, energy access, energy storage and energy optimisation products) that saw 44 deals amounting to $301 million.

“Both these sub-segments, i.e., mobility and energy are ahead on the maturity curve, and the benefit from favourable regulatory environment and easy-to-capture impact metrics.

Climate-smart agriculture, waste management and circular economy, and environment and natural resources - are the other subsegments gradually beginning to gain traction in terms of new innovative business models as well as investments,” the report said.

Third take away of the report is that a host of enablers lend climate-tech in India the potential for disruptive growth.