The climate tech ecosystem of India is at a critical crossroads. Climate tech startups here are struggling to access the growth-stage funding to scale solutions. A report by IIMA Ventures and MUFG Bank titled “Innovation for Impact: Indian Startups Driving Climate Action” paints a stark picture of the financial disparities.
Early-stage funding is witnessed to be strong and more than two-thirds of climate tech startups have been securing seed capital. The real issue emerges later. Just 2.5% of the startups progressed to Series A or beyond. Startups with promising solutions are hitting a brick wall when it comes to scaling.
Disparity in funding is really troubling. Electric mobility dominates the funding landscape and the segment has soaked up nearly 85% of the total investments. Clean transport solutions are undeniably crucial, but other equally important sectors are starved for capital. It is a question of where we are choosing to place our financial bets.
There is also a lack of focus on adaptation. Most climate tech startups in India are geared toward mitigation and aims to reduce emissions. But the reality is that climate change is already here.
The funding bottleneck is a wake-up call. Chintan Antani from IIMA Ventures said that without adequate growth-stage funding we risk losing momentum.
MUFG Bank’s pledge to deploy JPY 100 trillion in sustainability-related financing by 2030 is a step in the right direction, but it is clear that India needs more such commitments.
The India Climate Tech Initiative launched by IIMA Ventures and MUFG could be the game-changer. By funneling resources into underfunded areas and focusing on long-term resilience, the initiative might just unlock the full potential of India’s climate tech startups. But time is of the essence—India can’t afford to lose any more ground in the fight against climate change.
