The first round of funding is led by Sequoia Capital India and Kalaari Capital, besides other investors. Climes is addressing the climate finance problem , and has already partnered with brands like MakeMyTrip, zingbus and TEDx to change the status quo
Climes, a ClimateTech company, announces its first round of funding of USD 1.2 million. The company is building an engine that accelerates the flow of fresh capital towards climate solutions by making it convenient for brands and individuals to take meaningful climate action.
Founded by Anirudh Gupta (ex-Airbus) and Siddhanth Jayaram (ex-Kalaari Capital), Climes unlocks an untapped source of capital, amidst an urgent need to finance climate action. While total commitments for climate finance have steadily increased over the last decade, the actual ‘flow’ of capital to meet internationally agreed climate objectives significantly lags required levels. This is the problem that Climes takes head on.
The first round saw participation from Sequoia Capital India, Kalaari Capital, Nithin Kamath (Zerodha, Rainmatter), and Avaana Capital. Other notable participants in the round include Satyen Kothari (Cube Wealth) and Anshuman Bapna (Terra.do) from Stanford Angels, Keshav Reddy (Reddy Futures), and climate-tech founders Arjun Gupta (Smart Joules) & Akshay Singhal (Log9 Materials) among others.
On the announcement, Co-Founders, Anirudh & Siddhanth said “Finance is the single biggest lever to solve climate change. Fantastic projects and solutions for carbon mitigation exist all around us. However, the finance needed to scale these projects is simply not flowing fast enough. With this capital raise, Climes is i) building the necessary digital infrastructure to enable a big chunk of this money to flow transparently and ii) designing the right incentives for all market players to benefit. The delta of each rupee/dollar/euro that flows through Climes will have an outsized multiplier impact on global carbon mitigation.”
The Climes’ engine, at a macro-level, allows for a transparent flow of finance from where it is to where it needs to be. At a micro-level, it acts as the gateway for individuals and brands to take their first step towards climate action.
The emission calculations Climes makes are based on accurate mathematical models, in line with global standards of carbon accounting. Next, they choose from a list of independently-certified (Verra, Gold Standard etc.) or rigorously verified climate solutions based in India. These solutions either remove atmospheric carbon by restoring green cover in degraded lands, or avoid additional emissions by replacing fossil fuels with renewable energy sources.
This individual-led climate action is enabled by consumer brands. Partnering with Climes is the quickest way for brands to become climate-positive and kickstart their sustainability agenda with minimal effort. Some of the brands associated with Climes so far include TEDx, MakeMyTrip, Wedding Brigade and Zingbus.
Vani Kola, Managing Director, Kalaari Capital said “The rising awareness of the need for carbon neutral lifestyle and climate costs require urgent new solutions. Entrepreneurs offering solutions with climate-sensitiveness can create key differentiating propositions. Sid and Ani have lofty goals to bring climate awareness and action. Climes’ solution makes it possible for brands to embark on that transition by allowing customers to carbon-neutralise every transaction”
Adding to this, Nithin Kamath, Founder & CEO, Zerodha & Rainmatter said “The ideal solution towards climate change problems is to reduce consumption which may not be possible at all times. Making people aware of their carbon footprint and then making it available to offset maybe a good mid-way path. We are excited to be a part of their journey and learn ourselves along the way.”
The company intends to use the capital on two fronts. One, deploy more integrations with brands in fashion, food, travel, beauty & personal care, and enable a pathway for brands to become climate leaders within their categories. And two, expand their tech-stack to swiftly onboard high-quality climate solutions within India, as well as to measure and report impact transparently.
According to the founders of Climes, any climate plan should follow a simple formula, devoid of current complexities – ‘Cut what you can, neutralise what you can’t.’ In other words, reduce avoidable emissions through climate-friendly operations, and neutralise unavoidable emissions, through platforms like Climes.
By focusing on individual action and high visibility corporate partnerships, Climes does run the risk of limited impact, as the high focus on financing can be counter productive too. It is a moot question whether people should take action for sustainable living based on incentives or because it is a matter of preserving or improving their quality of life. On measures that go beyond financial metrics, like air quality, water quality, and predictable weather, to mention the least.
Slick Financial instruments that have entered the debate and the market have done more to grab headlines and provide cover for business as usual, than any other step like legal enforcement of existing laws or enacting tougher emissions norms, for instance.
Witness how firms have rushed to blame lack of ‘finance’ as a reason to delay installing Flue Gas Desulphurisation (FGD) setups at polluting thermal plants for over 5 years now, even as the same firms clearly have the money to pay dividends each year.
Again, putting the onus on individuals also has very limited benefits, when over 50% of global emissions could be caused by the top 200 firms worldwide and their output. One hopes Climes will be aware of the risks and act accordingly.