April 20, 2024: India’s burgeoning environmental technology sector, startups have flourished in the first quarter of 2024, securing a remarkable $240 million in funding. This substantial influx of capital underscores the growing momentum and investor confidence in innovative solutions aimed at addressing pressing environmental challenges.
A recent report from Tracxn reveals despite this influx of capital, the sector grapples with persistent hurdles, particularly concerning late-stage funding, amidst an evolving landscape of innovation and sustainability initiatives.
The report spotlights a shifting landscape of funding dynamics, revealing a predominant focus on early-stage ventures, which amassed a substantial $186 million. Meanwhile, seed-stage startups clinched $51.4 million, signaling continued investor interest in nurturing early-stage innovations.
Notable funding rounds during this period include EV-startup River’s successful Series B round, raising $40 million in February, and BluSmart’s $25 million infusion of debt and equity from ResponsAbility in January. These investments underscore a growing appetite for sustainable solutions and technological advancements in addressing environmental concerns.
Investments Surge in Indian Environmental Tech Startups in Q1 2024
While the sector experienced a surge in funding between 2018 and 2022, peaking at $2.47 billion, the momentum faltered in 2023, witnessing a significant downturn to $1.68 billion—a 32% decline from the previous year. Despite this setback, Bengaluru maintains its lead as the top city in terms of all-time funding, followed by Delhi and Mumbai.
Among investors, Blume Ventures emerges as a frontrunner in the seed stage, followed closely by 100X.VC, Sangam Ventures, Good Capital, and Soonicorn Ventures. However, late-stage startups continue to face challenges, with only two—Shadowfax and PocketFM—securing over $100 million in the first quarter of 2024.
This trend of late-stage funding lagging behind its counterparts has persisted for over a year, underscoring the need for sustained support and investment in this segment of the ecosystem. Venture capitalists remain cautiously optimistic, anticipating a gradual uptick in late-stage funding activity in the future.
As the sector continues to evolve, stakeholders emphasize the importance of fostering an environment conducive to innovation and sustainable growth in India’s environmental technology landscape.
