India's climate tech industry is at a critical juncture, with both significant challenges and great opportunities. Mohammed Shoeb Ali, Co-founder and Managing Partner at Transition VC—India's first energy transition venture capital fund—speaks about the challenges for climate tech startups, new trends, and the strategic vision required to make India a global leader in sustainable innovation.
Challenges in Climate Tech
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Talent Shortage: Identifying qualified research and development talent is a significant issue, traced to low R&D budgets in corporates and no culture of innovation at universities.
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Infrastructure Gaps: Startups particularly engaged in technologies such as hydrogen storage do not have access to required testing infrastructure in India.
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Funding Bottlenecks: Though early-stage grants and seed investments exist, there is a huge funding gap for startups looking for Series A to Series C rounds (usually $10–20 million). Bigger investments become available only when startups achieve significant revenue milestones.
Opportunities on the Horizon
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Energy Storage Systems: As solar and wind power increase, the demand for large-scale energy storage is imperative. This industry alone is expected to be a $30–40 billion opportunity by 2030.
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Green Data Centres: AI computing is fueling the demand for green data centres driven by renewable power and battery storage.
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Efficient Cooling Solutions: With regular heat waves, efficient HVAC and cooling solutions are a major market opportunity.
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Waste Heat Recovery & Heat Pumps: Industrial heat pump and waste heat recovery innovations are assisting in the replacement of fossil fuels in high-temperature applications, accelerating decarbonization.
Transition VC's Strategy
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Sector Focus: Transition VC is a firm believer in specialization over diversification, core technology innovations over business model modifications.
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Investment Strategy: The fund will fund 25 high-growth technology startups from its ₹400 crore fund, with a bigger ₹2000 crore fund planned to lure global tech firms to produce in India.
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Global Partnerships: Transition VC aims to introduce cutting-edge technologies from the West to India, using local manufacturing strengths to cater to global markets.
Distinguished Portfolio Startups
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EMO Energy: Creating cutting-edge, safe, and fast-charging battery packs for electric vehicles, such as liquid-cooled immersion batteries that reduce fire hazards.
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Fitsol: Offers software solutions for corporates to monitor and optimize Scope 3 supply chain emissions, enabling cost savings as well as carbon savings.
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Hydrogen Leak Detection: Investment in startups developing next-generation sensors for hydrogen leak detection, essential for safety in hydrogen infrastructure.
Ecosystem Building and Policy Needs
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Accelerator Launch: Transition VC, along with T-Hub and IEEE, has initiated India's first energy transition startup accelerator, providing funding, R&D, prototyping, and mentorship to early-stage startups.
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Policy and Infrastructure: Shoeb Ali advocates for greater emphasis on infrastructure, particularly for hydrogen distribution and storage, and stronger R&D ecosystems to enable deep-tech innovation.
Vision for the Future
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Gigantic Market Potential: India's energy transition sector is set to grow to $200 billion by 2030, and there is scope for over a dozen unicorns in the climate tech sector
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India's Strengths: India is good at taking core technologies to scalable and affordable applications, and it stands to compete globally in climate tech.
Sources: Indian Express, YourStory, The Hindu Business Line
