What Attracts VCs In The Renewable Sector? Momentum Capital Explains

As a venture capital firm, how do you see the connection between India's renewable sector and its linkage to finance? 

Ankur Srivastava: Renewables are foundational, but we look at them as part of a much larger system. Solar and wind capacity in India is scaling rapidly, but that growth exposes structural gaps—particularly around grid reliability, storage, and integration. Our lens is decarbonisation at scale. So instead of investing directly in conventional EPC or generation assets, we focus on technologies that enable renewables to work better—long-duration energy storage, grid technologies, advanced materials, and industrial decarbonisation.

India is one of the most policy-positive markets globally for climate and energy transition. Our experience as early investors in companies like Chakra Innovation and Urjan taught us that once policy alignment happens, climate technologies can scale very quickly—but patience is critical.

How does that shape Momentum’s approach to renewable-linked climate tech?

Bharti Singhla: My journey started as a chemical engineer from IIT Delhi, followed by consulting at BCG, and then as a co-founder of Chakra Innovation, where we worked on reducing emissions from diesel generators used for power backup. That experience gave me a very grounded understanding of how difficult it is to commercialise climate hardware.

At Momentum, I focus on climate tech investments across grid energy, storage, the built environment, and the circular economy. We are particularly interested in areas adjacent to renewables—such as long-duration energy storage, grid-scale flexibility, and end-of-life solutions for solar assets. As solar penetration rises, issues like panel recycling and early retirement become real business opportunities, not just environmental concerns.

You often draw comparisons between India and markets like California on the RE market?

Bharti Singhla: California adopted solar earlier and learned some lessons the hard way—around grid congestion, curtailment, and pricing distortions. India is now scaling solar at a similar pace, and we believe it can avoid repeating those mistakes.

There are strong parallels in both policy and technology. For instance, time-of-day pricing, virtual power plants, and distributed storage are becoming increasingly relevant. We are actively evaluating technologies that allow existing storage assets to be integrated into the grid more intelligently. These are critical enablers for renewables-heavy power systems.

Storage is often described as the missing link in India’s renewable transition. How are you approaching this space?

Ankur Srivastava: We see long-duration energy storage as one of the most underinvested yet critical segments. Short-duration lithium-ion batteries alone will not solve intermittency at scale. We have invested in companies working on alternative chemistries and grid-scale solutions.

One example is Vimano, a company developing membranes for hydrogen electrolyzers and redox flow batteries. While the company is US-registered, its core innovation originated in India, including work at IISc. This kind of cross-border innovation is exactly where we see Momentum adding value.

Beyond renewables and storage, where do you see major decarbonisation opportunities in India?

Ankur Srivastava: If you compare India’s emissions profile with where capital is flowing, there is a clear mismatch. A disproportionate amount of funding has gone into mobility and solar, while sectors like cement, steel, chemicals, and advanced materials remain underinvested.

Industrial decarbonisation is hard, capital-intensive, and slow—but that is precisely why venture capital has a role to play. With the right fund structure and long-term outlook, these sectors can generate both impact and returns.

How do you evaluate climate tech startups differently from conventional tech ventures?

Bharti Singhla: The era of accepting a permanent green premium is over. We look very closely at the path to cost parity. A solution must eventually compete with conventional alternatives on cost, or adoption will stall.

At our stage—pre-seed to seed—we typically invest between lab-scale validation and early commercial pilots. We want to see early proof points: pilot projects, initial customer interest, and a credible roadmap to scale. Climate tech requires deeper diligence—on technology, IP, and regulatory risk—than most consumer or software startups.

Nuclear, geothermal, hydrogen—do these fit within your renewable energy lens?

Ankur Srivastava: We are open to transformative technologies, including nuclear fusion and advanced hydrogen systems, provided startups can realistically play a role. Large-scale geothermal or SMR projects require massive capital, which limits startup participation in India today.

That said, we are currently in the process of investing in a nuclear fusion startup, which reflects our belief that baseload clean power will be essential alongside intermittent renewables. The key question for us is always: what can a startup meaningfully build and scale?

Finally, how does Momentum’s cross-border structure benefit renewable and climate startups in India?

Ankur Srivastava: There is increasing two-way movement of technology. Indian founders are building solutions for domestic energy challenges that can eventually be exported. At the same time, US-based founders—particularly those facing slower pilots or funding constraints—are looking at India as a viable market.

Being a cross-border fund allows us to support this exchange at a very early stage, which is uncommon in pre-seed investing. We believe this perspective can meaningfully strengthen India’s renewable and climate innovation ecosystem.