WestBridge makes debut bet in climate tech with carbon removal firm Varaha
WestBridge, along with Varaha’s existing investors Omnivore and RTP Global, will also pump in another $25 million as part of the second tranche of the Series B round, Sandeep Singhal, co-founder and managing partner at WestBridge Capital, said.
WestBridge Capital, a US- and India-focused early-to-growth-stage investment firm, is betting big on climate tech to become a large, for-profit opportunity for investors in the coming decade. The firm has backed Gurugram-based Varaha, a developer of high-integrity carbon removal projects, and led the $20 million Series B funding round.
The new capital will accelerate Varaha’s geographic expansion, strengthen its scientific and measurement, reporting and verification (MRV) capabilities, and scale a new industrial partnership model that extends its capabilities to partners worldwide, the firm said.
WestBridge, along with Varaha’s existing investors Omnivore and RTP Global, will also pump in another $25 million as part of the second tranche of the Series B round, Sandeep Singhal, co-founder and managing partner at WestBridge Capital, said.
“We have been looking at what's happening in the broad climate change area and what kind of opportunities come under the thesis. We were not expecting to find a company that is pretty mature and passing all the markers that we have for our for-profit business thesis," Singhal said in an interview with Mint.
According to him, Varaha is growing explosively and is near profitable. “From what we have seen so far, the carbon credit market is about to take off. And here we have, in India, a company that ranks among the top three in the world in that space. So it was like a happy serendipity that we found Varaha," Singhal added.
- WestBridge Capital has officially entered the climate-tech space, leading a Series B for carbon removal firm Varaha.
- The deal involves $45 million in total, giving WestBridge a 20% stake.
- Varaha is showing strong growth, with $100 million in contracted revenue projected over 2-3 years and near profitability.
- WestBridge is moving beyond its traditional strongholds into ‘real-world’ sustainability sectors like energy transition and agricultural practices.
- WestBridge believes Varaha is a top-three global player in the carbon credit space, which they anticipate will take off.
Founded in India, Varaha develops carbon removal projects across biochar, afforestation, reforestation and revegetation (ARR); regenerative agriculture, and enhanced rock weathering (ERW).
The company has a contracted revenue projection (order book) of $100 million over the next two-three years and has been nearly doubling its size each year. After the Series B round, WestBridge will hold around 20% stake in the company.
Varaha has already made significant strides, enrolling over 283,280 hectares across India, Bangladesh, Nepal, and Kenya. It works with more than 100 partners across these geographies to onboard smallholder farmers, with plans to increase this number by 4X in the next 12-15 months.
The company has already contracted and sold more than 230,000 carbon credits across a diversified project portfolio. Its customers include some of the largest marketplaces in the world, such as Klimate in Denmark, Good Carbon in Germany, Carbon Future in Switzerland, and top-tier companies in Europe, with strong interest also coming from financial institutions and tech companies across the UK and US.
Profitability thesis
With this, WestBridge Capital is now betting big on the climate tech segment in India.
“We do not have a choice. We have a crisis of gigantic proportions. It's a crisis bigger than any crisis humanity has ever faced. It slowed in the short term due to geopolitics, but activity has been bursting at the seams. Everywhere I look, there's a desire for various aspects of society to go towards sustainability and work against climate change," Singhal said, explaining why the firm believes there could be multifold outcomes from the segment.
The firm that has so far backed companies such as Meesho, Physicswallah, Rapido, Vini Cosmetics, Milky Mist, Star Health, among others, has in the last five years invested in 79 funding rounds alongside other investors, pumping in more than $2 billion in the country, data from Venture Intelligence shows.
In the last two years alone, the firm has backed new-age companies such as Juspay, Finfactor, SpeakX, UnifyApps, Edelweiss Asset Management, Tessel, Nexthop AI, Lucidity, FinBox, Way2News and UptimeAI.
It also has close to $2 billion in exits, according to data from Venture Intelligence.
Apart from fintech, consumer and consumer tech, and SaaS AI, the firm believes there is an investment opportunity in energy transition, data centres, and agricultural practices.
“We're doubling down on existing businesses and growing our ownerships there," Singhal said, adding that the firm will continue to maintain its pace of investment in India.
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