Representative image for Indian startups.
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The Startup Mahakumbh in New Delhi from March 18 to 20 is a splendid platform for the startup ecosystem to showcase that it is not just about easy bets and valuations.
The three-day event — being held in the backdrop of the troubles witnessed at Byju's and Paytm — presents a great opportunity for the startup fraternity to send out a message that it can be a powerful force for good.
Byju's and Paytm have been the poster boys of the Indian startup ecosystem that had more than 100,000 recognised startups as of 2023. At one point, Byju's was India's most valued startup commanding a valuation of $22billion. India is also home to multiple unicorn startups, many of these in the edtech, fintech, and health tech segments.
Unfortunately, a large diverse country like India that faces unique challenges on the Climate Change front continues to lack a significant number of big successful startups in climate tech. The same also holds true in the agri-tech domain.
Having more home-grown climate tech startups with the ability to move the needle on the innovation front can ensure that India can come up with both national and region-specific adaptation and mitigation solutions to address the challenges posed to people’s lives and livelihoods by extreme weather events. An increase in the number of climate tech startups that can continually raise the bar could also contribute to the reduction of carbon emissions by hard-to-abate sectors such as cement and steel.
The World Economic Forum’s Global Risks Report 2024 had placed ‘extreme weather events’ in the second spot in the list of ‘global risks ranked by severity’ in the short term. It also categorised extreme weather events as the biggest global risk over the long term.
A rise in the number of agri-tech startups with the potential to become soonicorns (soon to become unicorns) and preferably unicorns can go a long way in raising the climate-resilience of India’s agriculture sector. They can also contribute to the process of boosting agriculture yields.
In conjunction, climate tech and agri-tech startups can provide impetus to the Atmanirbhar Bharat agenda by helping India achieve self-reliance in two critical areas of technology. Incidentally, transfer of climate technologies is one of the key issues that continually gets raised by developing countries, including India, at the COP climate summits.
Until now, investors, though, have not pumped in money into climate tech startups as they have done in other segments of the Indian startup space. Whether that is due to the investor fraternity not finding sufficiently interesting ‘investible’ opportunities in the climate tech domain, or the hesitancy on their part is owing to the belief that it is hard to visualise the hefty returns that can be made from local climate tech startups is unclear.
Although there are some startups in the Indian agri-tech space, the investor appetite for this segment, too, has not matched the level as areas where earning quicker returns seem easier and, also, appear a less risky proposition.
Internationally, however, the climate tech startup space has witnessed a flurry of investments, with the maximum taking place in the United States. In October 2021, a CNBC report mentioned Blackrock CEO Larry Fink saying that the climate tech startup space may witness the rise of 1,000 unicorns.
If the Startup Mahakumbh sees PE firms, VC funds, angel investors, etc. visibly demonstrating an interest in taking big bets on startups operating in the areas of climate tech and agri-tech it could be one of the best possible outcomes from this gathering. It could lead to more entrepreneurs choosing to venture into these promising domains which, apart from the benefits mentioned above, could also raise the vibrancy of the Indian startup arena by providing a fillip to breakthrough innovations. Incidentally, ‘Bharat Innovates’ has been chosen as the central theme for the event.
From the investor perspective, embarking on such a step could bring with it both monetary and reputational gains. It could open more new areas for investors from which to make money, and, also, shore up their image in the eyes of stakeholders as one driven by a desire to make a difference in society.
The Startup Mahakumbh can play a major role in shaping a new India. It would, therefore, be good if such events are not reduced to just a chest-thumping exercise for new-age businesses.
Sumali Moitra is a current affairs commentator. X: @sumalimoitra. Views expressed are personal.
(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH).