Green Frontier Capital, a US venture capital firm, plans to build a $100 million fund. Sandiip Bhammer launched the fund in 2021 to raise India’s and the world’s sustainability index by investing in climate tech firms…
A US-based early-stage venture capital fund focused on climate tech businesses in India, Green Frontier Capital believes these new-age companies would increase the sustainability index in India and worldwide.
Climate tech firms in India seem promising, so the VC company aims to double down and form a $100 million India fund.
Green Frontier has invested in 11 Indian firms since its 2021 founding by Sandiip Bhammer, an investment banking and equities market veteran.
The VC firm invests in agritech, foodtech, EV ecosystem, and sustainable living. BluSmart Mobility, Battery Smart Swap Station, ElectricPe, Chupps, Zero Cow Factory, and Nutrifresh are its startups.
Green Frontier often invests in seed and Series A companies through direct investments, collaborations, and investment platforms. It wants to create a $100 million dedicated fund and has applied for a license.
Bhammer told YourStory, “Our vision is to invest in companies that are digital in design and those who are driving India’s sustainability goals.”
Bhammer said India is the third-largest greenhouse gas emitter after China and the US due to its size.
“The country (India) is a significant contributor to, and vulnerable recipient of, the adverse impact of climate change,” he says.
“Combating climate change is not merely a trend but an urgent necessity,” says Green Frontier’s creator, adding that India and China must join the net-zero movement.
He believes Indian climate tech startups would play a major role in India and worldwide.
The country’s growing urbanization has highlighted sustainable practices, including water conservation and pollution reduction. Climate change affects agriculture, requiring adaptable farming methods.
Bhammer feels that younger generations’ understanding and commitment to sustainability could lead more enterprises to embrace sustainable practises.
Green Frontier invests in climate-focused agritech firms. It invested in Pune-based hydroponic firm Nutrifresh, which grows fruits, vegetables, and herbs without soil and 90% less water.
Green Frontier typically invests $0.5 million pre-seed, $1 million seed, and $2 million Series A.
When investing, the firm must ensure that the startup has measurable sustainable development goals (SDG) impact and discloses this information.
Green Frontier’s EV mobility companies have created over 1.5 billion zero-emission kilometres, saving 22 million litres of fuel, according to Bhammer. This reduced carbon dioxide by 400,000 tonnes, he said.
When investing, VCs look for startups that can produce 20-25% internal rates of return over six to seven years.
sustainable business
Bhammer claims the VC firm has invested $30–32 million in India. Investors value its assets at $150 million.
Battery Smart was valued at $13 million by Green Frontier Capital in 2021 and is now worth over $400 million.
Nutrifresh’s valuation growth has also been similar, he notes. Green Frontier invested $15 million (Rs 120 crore) in Nutrifresh in May 2022. The startup is worth Rs 460 crore or so.
We did well, as shown in our portfolio. Many have become sector bellwethers, adds Bhammer.
Climate tech investments are outpacing venture capital and private equity investments, according to McKinsey, according to Green Frontier’s founder.
Climate tech startup VC funding is emerging, with firms like Avana Capital concentrating on the subject.
Bhammer says, “I think we were the only fund that started with a climate focus from day one. We distinguish ourselves that way.
He adds that Frontier Capital’s team has decades of financial and technology experience.
Bhammer does not think the funding winter will affect climate tech firms.
He said global VC funding for climate tech businesses rose 89% to $70 billion in 2022. He predicts some moderation this year, but not a sharp decline.
Bhammer also mentions difficulties for venture capitalists investing in climate tech firms.
The biggest hurdle for entrepreneurs is creating scalable, innovative solutions. Second, innovative solutions require significant investment. Finally, uncertainty about the outcome may deter R&D spending.
Bhammer thinks the Indian economy rotates through themes. Liberalisation led to the internet boom and telecom revolution. He said the next 20 years will be climate-focused.
He thinks many Indian climate change solutions would work worldwide, especially in emerging markets.
