Why Climate Tech in India Is Facing an Identity Crisis

India’s climate tech is booming, but mostly in SaaS. Here’s why the country needs deeper investments in clean energy, carbon removal, and pollution solutions.

India is pouring money into climate tech—but not where it counts. While global headlines celebrate innovation in carbon capture, battery breakthroughs, and hardware-led solutions, India’s climate funding boom is being funnelled into software: ESG dashboards, carbon credit marketplaces, and AI-driven compliance tools. These are important, yes—but they barely scratch the surface of the climate crisis.

On a global level, companies building for climate change in North America and Europe raised nearly $24 million in 2024, the story is contrasting differently in India. Companies solving for a similar issue raised a total of $1.3 billion. A quick scan of recent funding announcements reveals a familiar pattern: either another SaaS platform for ESG compliance, or a marketplace for carbon credits. It might even be an AI tool to measure corporate emissions. While these are necessary pieces of the climate puzzle, they are far from the deep-tech solutions needed to tackle India’s—and the world’s—most pressing environmental challenges.

Out of the 30 most polluted cities in the world, 21 are in India. Byrnihat, a small town in Meghalaya, recorded the highest PM2.5 concentration in 2024 at a staggering 128 µg/m³ — eight times higher than WHO safe limits. Long-term exposure at these levels isn't just an air quality issue; it's a public health crisis, linked to respiratory disease, reduced life expectancy, and premature deaths.

So what is the gap that climate-tech focused companies are trying to solve? Let’s try and break this complex problem down even further.

The Climate Accounting Gold Rush

Of the startups that raised $1.4 billion last year, a number of carbon accounting startups raised funds. Among them are Accacia, which raised $6.5 million in a seed round in April. Additionally, Sprih raised $3 million in a seed round, while Alt Carbon secured a substantial $12 million in another seed round.

These are valuable businesses, but they operate at the surface layer of climate action—tracking, trading, and offsetting emissions rather than preventing or eliminating them at the source. That’s the heart of the crisis: funding is skewing toward visibility rather than viability. Venture capital is flowing to low-risk SaaS startups instead of deep-tech climate solutions — technologies that remove carbon, purify air, decarbonise industry, or offer clean energy alternatives.

Also Read: Climate tech growth for next decade

That path is harder. It demands R&D muscle, patient capital, and often, longer timelines to scale. But it’s also where the real climate breakthroughs — especially for a high-emissions, high-pollution country like India — are most urgently needed.Yet, the lion’s share of venture attention has gone towards carbon visibility tools rather than pollution mitigation or adaptation technologies. There’s a growing risk of over-financing climate SaaS and under-investing in climate hard tech — clean energy alternatives, carbon removal, air purification, industrial decarbonisation — all of which require deeper tech bets, patient capital, and a stronger R&D backbone.Like for instance, Alt Carbon which is building agri infrastructure for climate action aimed at looking at disposal of carbon much more efficient, according to their website.

WeWork Labs take: Climate accounting may offer a dashboard view of the problem. But dashboards don’t clean the air. The next wave of climate innovation — especially in India — will need to move from measuring impact to meaningfully making it.

The Real Opportunity

The upside? India’s climate-tech opportunity is massive — and growing. Rapid urbanisation and industrial expansion have created urgent demand for air quality solutions, clean energy transitions, waste management, and water conservation technologies.

The country's environmental technology market was valued at $23 billion in 2023 and is expected to grow at a CAGR of 10% through 2028. Meanwhile, India has committed to ambitious climate goals, including a net-zero emissions target by 2070 and a 50% renewable energy share by 2030. Climate tech startups will be instrumental in helping the country get there — if they can access the right kind of capital and backing.

For investors willing to take the long view, this is a greenfield opportunity — literally and figuratively. The real climate-tech revolution in India won't come from dashboards. It'll come from digging deeper into the core of the crisis: air, water, energy, and infrastructure.

Because when the smoke clears, quite literally, that’s where the real impact lies.