Centre for Innovation Incubation and Entrepreneurship (CIIE), the incubator-cum-accelerator arm of IIM Ahmedabad, is planning to launch a new climate tech fund with a target corpus of $100 million, a senior executive at the organisation told Business Today.
This will be a follow-up to its maiden fund Infuse Ventures, which is fully drawn currently. Infuse Ventures focused on sustainability and clean energy sector in India.
The fund, tentatively titled Bharat Climate Fund, will look at a broad range of opportunities including e-mobility, energy efficiency, sustainable manufacturing, alternative proteins and more.
Besides Infuse, CIIE runs two other funds – Bharat Innovation Fund and Bharat Inclusion Fund. Bharat Innovation focuses on deep-tech start-ups while Bharat Inclusion Fund backs India Stack-based products that target the next billion internet users.
The company expects to make a first close for the climate tech fund later this year at $50 million, said Shyam Menon, a partner and co-founder at Bharat Innovation Fund.
“Broadly, the interest levels are increasing, although most of the global capital is still focused on Europe and North America for climate. There is a lot of capital available and we expect that in the new 2-3 years, a lot more global capital will come to India. If you don’t solve the carbon problems from India perspective, you are not solving it for the world. It’s not a localized problem, it’s a global problem,” Menon said.
“Opportunity sets that the start-ups in India addressing are only a small percentage of this ecosystem. So, we will have to see where the clear winners are going to be,” he added.
With a corpus of Rs 105 crore, Infuse Ventures was one of the first climate tech focused venture capital funds in India and the first VC fund initiative of CIIE. World Bank’s International Finance Corporation or IFC, Small Industries Development Bank of India (Sidbi), BP Ventures, the investment arm of British oil company BP are partners in the fund.
Menon said the company expects most of its limited partners (LPs) from Infuse to join the new fund.
The fund invests between Rs 1-10 crores and provides access to additional capital through its network of debt and equity investors.
Proklean, a bio-based replacement of chemicals; Ecolibrium Energy, an energy management and optimization solution; REConnect Energy, a firm that provides forecasting and lifecycle services for energy markets, and Tessol, a thermal energy storage solution provider are among its portfolio.
Both Bharat Innovation Fund and Bharat Inclusion Fund have made seven bets each so far since starting investments in 2018, and will be fully drawn with a total of 12-14 investments from each by the end of this year. A total of $100 million was raised for these two funds.
Bharat Innovation Fund backs deep-tech start-ups that build global IPs from India. It invests up to $4.5 million in pre-Series A and Series A startups while Bharat Inclusion Fund is a seed fund that invests up to about $1 million in ideas building on the India Stack concept such as micro-insurance, micro-savings, and mobility products.