India's role in decarbonization and growing seed-stage opportunities
India accounts for 3% of historical global emissions but now contributes 8% annually. It's climate vulnerable & import energy dependent. Big problems. We discuss where seed VCs can help + our updates.
Hi there,
It’s been some time since we sent out this newsletter, but a whole lot has happened in recent months at Momentum Capital. We finalized several exciting new investments, expanded our team, hosted engaging events, and began publishing a series of sub-sector reports for India’s climate tech space. And our portfolio made positive strides. All those updates below.
Summary of this issue:
Report: Unpacking the seed-stage climate tech opportunity in India
Announcements: New investments + Vimano fundraise
Ecosystem: Seeding climate tech in India + Events
Updates: Welcoming two new team members
Portfolio: Updates from Focal, Confido, Dharaksha, CarbonStrong & EarthEn
1. But first, let’s discuss India & decarbonization.
In the last newsletter issue, we explored the shifting global sentiments around climate change, noting the growing concern, even despair, but also denial in certain corners of the world. This time, we turn our attention to India — rapidly growing and poised to be a key player in global decarbonization efforts.
Our team has been diving deep in the India climate tech opportunity from a seed-stage opportunity lens. We’re now publishing a series of short reports on every sub-sector, and sharing it with the ecosystem for wider use, discussion & action. In this issue, we summarize the first one: Unpacking the climate tech opportunity in India.
Till 2022, India had contributed just 3% of historical cumulative global carbon dioxide emissions, compared to 25% by US, 22% by EU & 13% by China. But now, India’s share has already reached 8% of annual global emissions & it’s growing rapidly, while the share of the historical emitters is dropping (bar China). The delinking of GDP growth with emissions is still far away in India.
India is also highly vulnerable when it comes to climate change & ranks 113th on the climate vulnerability index. It’s already reeling with heat waves, droughts, water stress, unpredictable monsoons, glacier melt and health hazards that have been attributed to climate change. Adding fuel to this fire is India’s heavy reliance on fossil fuel imports — it imports 85% of its crude oil and 45% of its natural gas demand.
This makes decarbonization a strategic necessity for the country to become energy independent and realize the vision of ‘Atmanirbhar Bharat’. For India, decarbonization is not optional.
Now’s the time to invest in Indian climate tech.
Despite the above challenges, India’s policy landscape, growing corporate focus and startup ecosystem have been catalyzing its green transition. The public opinion is also supportive: 82% of people in India think climate change is real and 54% think that it’s caused mostly by human activities (as per a Yale study). Importantly, 58-59% people think India should use less fossil fuels and more renewable energy. This contrasts a bit with the US where only 46% of adults believe climate change is real & human-made, and there’s a renewed focus on drilling.
While India's carbon footprint is growing, so is its potential to shift the trajectory. Its rapidly expanding middle class, industrial activity, and infrastructure investments make it a critical hub for climate tech innovation and investment. For venture capital firms like us, this presents a timely opportunity to back solutions that are not just mitigating emissions but are also solving fundamental issues of energy security & economic growth.
We believe time is ripe to invest in Indian climate tech. Here’s why:
Shortened cost parity horizons: Electric 2W and 3W vehicles have achieved purchase cost parity with Natural Gas Vehicles. 4W vehicles and buses are on track to achieve TCO parity in the next few years. Solar PV already became the cheapest LCOE source in India in 2023.
Accelerating climate-positive policies: India is a leader in climate positive policies in the emerging & developing markets. As per BNEF ClimateScope, India ranks first as the most attractive emerging markets for renewable energy investment.
Emerging market for exits: Globally, climate tech saw an increase in exits in 2024, most of them being acquisitions. However, India had 2 of the 6 climate tech IPOs in 2024 as per CTVC.
Historically, VC funding in Indian climate tech has been low. Only ~4% of global climate tech VC funding (~US$10Bn) has been deployed in India from 2010 to H1 2023, as per Holon IQ. It has been growing in recent years though, with over US$1Bn invested in 2023 and 2024, as per IIC.
Of course, some challenges still remain, primarily low availability of patient capital for deep tech solutions, lower size of catalytic capital, as well as a smaller pool of late-stage venture investors beyond Series A. However, it’s trending in the right direction. And a few more success stories in India climate tech will be huge amplifiers.
Opportunities for founders and seed-stage VCs
At Momentum Capital, we’re excited about innovations across sub-sectors and varied approaches to tackle the climate crisis. But climate tech is a horizontal and cuts across nearly every industry. If there’s a carbon footprint, a climate intervention is possible. This means that the founder background, market of experience, and solution set has no typical archetype.
This also makes structuring the market map in climate tech a bit difficult — one can slice and dice it several ways. Below is one approach we’ve taken to map intervention opportunities at the top level.
Over the next few weeks, we will do deep dives into each of these columns & share those. Those will bring up very specific startup opportunities for seed-stage investors and founders. If you are solving problems in any of these for or from India, or are embedded in the domain to share your notes & expertise, do reach out to us.
2. New investments + Vimano announcement
Since the start of 2025, we’ve deployed capital in pre-seed/seed startups at a very fast pace. In this period, Momentum Capital has completed two new investments and three more are at the final paperwork stage. Additionally, we’ve also participated in up-rounds of two of our portfolio companies in this time. In short, we remain in very active capital deployment mode.
Of all these new investments, Vimano Inc. has announced its fundraise and we’re happy to share this latest addition to our portfolio. Vimano is building nanotech membranes to power the world’s energy transition. We invested in their seed round, along with Ankur Capital, 3i Partners & others.
Large-scale energy transition requires innovation across multiple solution pathways to reduce cost & increase durability. Vimano's innovations in ion-conductive membranes are significant, as they accelerate solutions across long-duration energy storage, hydrogen production, as well as fuel cells. We are excited to back this excellent team, led by Murari Ramkumar and Dr. Nagesh Kini.
3. Seeding climate tech in India + Events 🗓️
Earlier this year, we brought together several climate tech founders, investors and ecosystem enablers to engage in a townhall in Bangalore. It was a great chance to discuss seed-stage climate tech in India, including patient capital for innovation, commercial viability, policy support and more, both from a global and Indian lens.
Along with our friends at The Sustainability Mafia, this was a fun event hosted by Ankur & Atharva. And it highlighted again the collaborative nature of people in the climate tech ecosystem. If you were there, thanks for joining us. More meetups are coming soon.
On the US front, Bharti participated in a round table discussion with the former Union Minister Mr. Jayant Sinha, Dean Dr. Arun Majumdar, Dr Chris Field and Malachy Nugent as a part of the India–US Advanced Energy Forum at Stanford Doerr School of Sustainability.
In addition, we’re also pleased to sponsor SusCrunch2025 by the SusMafia team. Strong movements are built by strong communities. Their team has been doing solid work in bringing together the Indian climate tech ecosystem, and we’re happy to provide a little impetus to augment their momentum. It’s on July 19 in Bangalore and details are here.
4. Team updates:
Since our last issue, we’ve welcomed two new team members to Momentum Capital. We sifted through over a thousand applications to hire the two of them, and their positive impact has been immediately felt.
Atharva Wagle joined us as an Investment Associate, based out of Mumbai. He's a dual degree chemical engineer from IIT Kharagpur, and certified Level 3 CFA. He worked as a senior analyst with Deutsche Bank's Mumbai office prior to this. We’re glad that he’s rapidly settled into his role as our first responder for sourcing, diligence & research.
Harshit Varshney joined us as a Pre-MBA Summer Associate, based out of Gurgaon. He’s headed to Kellogg MBA this fall and holds a masters from IIT Madras. Earlier, he worked with IndoFast Energy and Sun Mobility. His operator experience of EVs & batteries space has added another dimension to our climate tech efforts.
5. Portfolio updates since the last issue:
CarbonStrong won the Avaana Capital Startup India NITI Aayog Grand Challenge
Focal raised a follow-on round to decarbonize heating solutions
Confido Health raised $3 million in a round led by Together Fund
Dharaksha raised INR 24.8 Cr led by Avaana Capital
EarthEn's CEO included in Marquis Who's Who in America for pioneering efforts in combating climate change
Poll:
If you’ve read this far, please take one more second to help us identify the breadth of our community.
In the last issue’s poll, we had asked if you felt climate change was a hoax, exaggerated, or a big problem. While the votes were few, an overwhelming 100% of you felt climate change was a big here & now problem!
That’s it for this issue. As always, if you or anyone you know is working on any promising climate tech solution (especially India or US), or want to work/invest in climate tech, give us a shout. We’d love to hear from you.
— Momentum Team
About us:
Momentum Capital is a pre-seed/seed venture investor in climate tech, health and cross-border models. We champion Indian-origin founders and our team is spread across the US, Canada & India.
Useful links: Momentum Capital | Portfolio | Insights | Ankur | Bharti | Atharva