In a lab tucked away in a Bengaluru industrial park, a team of engineers is designing modular batteries meant to power electric buses across India’s Tier 2 cities. A few hundred miles away, a young founder is building AI software to track carbon emissions across factory chains in Gujarat. In Hyderabad, another team is prototyping bio-based packaging material to replace single-use plastic.
Across India, climate tech startups are multiplying — offering solutions to some of the most pressing environmental challenges the country faces. But many of them are finding that while innovation may be in abundance, capital is not.
Despite global calls for climate action and India’s own net-zero commitments, funding for climate-focused startups remains sporadic, cautious, and slow-moving. The result: visionary founders trapped in a cycle of pilot projects, pitch decks, and premature pivots.
Ideas That Could Change the Future — If They Survive the Present
The startup ecosystem in India has never been more vibrant. In the last five years, founders have emerged with solutions for decarbonizing transport, electrifying agriculture, capturing industrial emissions, and digitizing the carbon economy. Some of these ventures — like Bintix, a waste intelligence startup, or CarbonMint, which provides MRV (Measurement, Reporting and Verification) tools for carbon credits — are gaining international attention.
Yet most are running on grants, accelerators, and personal capital rather than institutional venture funding. Many have yet to close even a seed round. Some are skipping formal fundraising altogether — turning to consulting contracts or white-label services to stay afloat.
“There’s no shortage of ideas,” said Apoorva Iyer, an impact investor in Mumbai. “What’s missing is patient capital that understands the longer time horizons and infrastructure dependencies climate tech needs.”
The Problem Isn’t Vision — It’s Venture Economics
While Indian startups in fintech, SaaS, and D2C sectors routinely raise millions, climate ventures are caught in a structural mismatch: they often require significant upfront investment, carry hardware risk, and have return cycles that stretch beyond the typical three-to-five-year VC window.
According to a 2024 report by Climate Collective and IVCA, climate tech accounted for less than 3% of total venture funding in India, despite representing a critical pillar of national development goals.
“There’s a romanticization of climate innovation,” said Neeraj Bhaskar, founder of a clean mobility startup in Pune. “But when it comes time to write a cheque, most VCs still prefer safer bets — lending apps, cloud platforms, cosmetics.”
Policy Push, Capital Pause
India’s central government has signaled strong climate intent. The net-zero by 2070 pledge, green hydrogen mission, EV subsidies, and production-linked incentives (PLIs) for solar and battery manufacturing are laying important groundwork. But execution at the state and district level remains uneven, and financial instruments to derisk climate investments are largely absent.
“What’s needed is a blended finance ecosystem,” said Neha Jindal, a climate finance consultant. “You need concessional capital, sovereign backing, and catalytic risk-sharing to unlock private investment. Without that, we’re just recycling headlines.”
Global Appetite, Local Reluctance
International funds like Breakthrough Energy Ventures and Shell Ventures have made select investments in Indian startups, but domestic capital lags. Family offices and CSR foundations show interest but rarely lead institutional rounds. Even sustainability-focused venture funds tend to favor digital models over hard tech solutions.
A handful of founders have begun looking overseas — to Europe, the Middle East, and Southeast Asia — for both funding and customer traction. Others are pivoting away from core environmental goals to appeal to more “investable” markets.
“I started out building for climate,” one founder said, requesting anonymity. “Now I just call it ESG software — it helps in meetings.”
A Startup Ecosystem at a Crossroads
For a country that will bear disproportionate climate impacts — rising heatwaves, erratic monsoons, sea-level rise, and air pollution — the stakes are clear. India needs scalable, homegrown solutions for sustainable energy, urban mobility, agriculture, and circular economy systems. It also needs capital that can match the urgency.
“Climate tech isn’t a vertical anymore,” said Shalini Roy, a policy analyst at a Delhi think tank. “It’s the infrastructure layer beneath everything — mobility, water, health, employment. If we don’t fund it now, we’ll be paying much more later.”