Nature-Fix Climate (NFC) Ventures, their Bengaluru-based fund, aims to close the first round of $80-$100 million by March 2022 and the rest by December, taking the overall fund size to $200 million. The fund is backed mostly by US-based investors, the co-founders told ET.
“We have been able to get in principle commitments from five anchor LPs (limited partners) including an HNI, an ESG fund of a large Wall Street firm, and a climate-focused institution,” said Moily, whose earlier ventures were in the agriculture and hydrocarbon sectors.
The fund will have a 12-year tenure, with the first five years earmarked for investments and the rest for follow-ons and exits, co-founder Srinivasan said. He has previously set up venture funds in India for Intel Capital, Carlyle and Abraaj, and led Abraaj’s investments in Big Basket and Care Hospital.
While there are other venture funds in India with climate as one of many focus areas, NFC is a pure play climate tech fund, the two co-founders said, and added: “Our promise to investors is not just commercial returns, but also the decarbonisation”.
A recent study by
dealroom.co and London & Partners, which lists India among the top 10 countries globally in climate tech investment, says the country’s climate tech firms have got over $1 billion in investments over the last five years.
Global Play
NFC Ventures will focus on investments in India, a consumer market for climate solutions, as well as invest in Israel, a hub for tech solutions, with an average ticket size of $5-15 million. “We expect the fund to have about 12 investments in India and about 4-5 investments in Israel,” Srinivasan said.
The duo will invest in early and mid-stage companies whose products or services lead to reduced carbon emission. Most of the investments will be in spaces like energy storage, battery technology and services, sustainable agriculture, and green building. These are sectors that potentially can have maximum impact on the reduction of carbon footprint, Moily said.
Karnataka Startup Vision Group chairman Prashanth Prakash said climate tech is at a crucial juncture. “It is one area where the business world and the social world are more intertwined than any other space that we can think of. In fact, the next couple of venture capital cycles will see significant participation from climate tech startups.”
The market, he added, is global and significant disruptions in this space can result in “big” venture-like outcomes.
India is going to be on the frontlines for both mitigation and adaptation, and the opportunity is both massive and inevitable, according to a tweet by Harsh Dubey, general manager at Lowercarbon Capital, a Washington-based firm that backs companies that cut CO2 emissions.
NFC Ventures also plans to have a micro fund within the larger fund to invest in about 15 companies, which could be moonshots, and one that could over a period be game changers in the climate tech space, the two co-founders said.
India has closely aligned itself with the global climate cause, and Prime Minister Narendra Modi even urged the G-20 countries at its recent meet in Italy to set up a clean energy projects fund, among others. In the last seven years, India’s installed solar energy capacity has increased 17 times as the country has set major milestones.
