Why Zerodha's Rainmatter is still writing climate cheques even as VCs pull back

“All the climate tech bets we’re backing, we have a 10-15 year lens on them. That’s why we’re not worried about the short term," Dinesh Pai, who leads Rainmatter's venture investments, said in an interview.

Since it began investing in 2016, Rainmatter has made 43 climate-tech investments, investing a total of ₹350 crore. Rainmatter Foundation, which was set up in 2020 works as a different, non-profit entity which provides climate-related grants.

While the firm's initial focus was on fintech, in the early 2020s, it ramped up investments to include industries like health and wellness as well as climate.

Rainmatter’s stance comes at a time when many Indian venture capital funds have grown cautious on climate-tech, a sector that, despite early optimism, has struggled to deliver healthy exits or meaningful scale.

Average cheque sizes in the segment have declined over the past three years, dropping from $52 million in 2023 to $28 million in 2024 and $27 million in 2025, according to data from Venture Intelligence, a private company tracking platform.

“We never started investing in climate because other VCs were investing. It’s not like we’re going to stop now because others have," said Pai.

EV not in focus

Climate tech is an umbrella term that includes electric vehicles, sustainable agriculture, water management, circular economy models, waste recycling and more.

In India, climate-focused venture capital has leaned heavily towards EVs and mobility, while private equity has largely backed renewable energy plays. Between 2022 and 2025, among the 10 largest climate-tech deals by venture capital, eight were in EVs.

Most of Rainmatter’s climate-tech bets have spanned companies focused on recycling agricultural waste, climate insights, climate financing and controlled farming. Alt Mat, Amwoodo, Aurassure, Climes and Ossus Bio are among the companies in its portfolio.

“We’ve been conscious that EV and mobility have had a lot of access to capital. We’re focused on other sectors where capital is lacking," Pai said.

That said, the firm has not fully stayed away from EV. Earlier this month, Rainmatter led a $3 million pre-Series A round in Naxatra Labs, which manufactures motors and controllers for EVs.

From its climate portfolio, dairy brand Akshaykalpa has been a breakout. Rainmatter first invested when Akshaykalpa raised $15 million in a Series B in 2022, and also participated in the company’s $12 million Series C.

Rainmatter has around 142 investments across fintech (35), health and fitness (41), media (8), climate (43) and another 15 in other industries. Overall, Rainmatter’s assets under management (AUM) are roughly ₹1,600 crore.

Exit timelines

The firm invests jointly, both out of its new ₹1,000 crore alternative investment fund (AIF) and the Zerodha balance sheet, similar to how many corporate venture funds operate.

Rainmatter's AIF has a long duration, set at 15 years with an option to extend it for two more years. It's all a part of how the firm sees itself as a patient player in the country's startup ecosystem.

“When we reach the end, we can figure out if we want to do a continuation, if at all," said Pai. “We don't want to push some of these companies to give us exits."

Since the Zerodha-backed fund does not have a limited partner structure, Pai said Rainmatter can deploy capital with a longer horizon and without the pressure that time-bound VC funds face to push founders towards exits within tight timelines. He, however, said that exits still matter for the fund, stating that “distributions are as important as investing".

Across its portfolio of companies, Rainmatter hasn't fully exited any of its investments, according to Pai. It partially exited its investment in credit card management platform CRED through a secondary round. Apart from that, the firm declined to name other companies where it has made partial exits.

The decision to back companies was born out of Zerodha founders Nikhil Kamath and Nithin Kamath wanting to support entrepreneurs in the country. “The idea was more about building an ecosystem and supporting more entrepreneurs who are solving for problems that we see around us and don't get VC capital because they aren't high growth and scale," Pai said.

That flexibility on time and returns has coincided with an increase in deal-making. Over the past two years, Rainmatter has entered the list of the most active investors tracked by Venture Intelligence, with the dataset showing about 24 investments in 2025 and 28 in 2024.

Pai said Rainmatter deployed about ₹400-450 crore over the past year, but stressed there are no internal targets for next year’s pace of fund deployment.

India-based VC firms raised significant capital in 2025. A report by Inc42 Datalabs, a startup intelligence platform, estimates that funds worth $9 billion were launched for Indian startups in 2025 (through 28 September), including vehicles that are India-focused as well as those that invest in India alongside other geographies.