Climate tech-focused venture capital firm Green Frontier Capital expects overall startup investments into energy efficiency and related sectors to see an increase of 20-30% this fiscal year, especially if higher energy prices persist. “The current fuel crisis underscores the fact that sustainability is no longer an ESG theme but an economic and energy security imperative. We expect renewed investor interest in sectors such as clean mobility, energy efficiency, batteries and grid infrastructure,” Sandiip Bhammer, founder and managing Partner, Green Frontier Capital, told Fe.
However, the firm believes that capital will be deployed far more selectively than before. It believes areas such as fleet electrification, charging infrastructure, battery tech and EV financing are likely to see the strongest interest. “Investors are now focusing more on unit economic positive EV businesses, given the recent spate of EV startup failures and lack of access to growth capital,” Bhammer added.
Highly Selective Deployment
Green Frontier Capital’s deployment strategy over the next 12–18 months will be highly selective, too. “We are not chasing pace for the sake of deployment. If valuations or fundamentals do not make sense, we are comfortable sitting on cash and waiting for the right opportunities,” Bhammer added. The firm expects to continue backing a concentrated portfolio of climate businesses where unit economics are improving and scalability is becoming clearer. A significant portion of its capital will also be reserved for follow-on investments in high-performing portfolio companies because it believes supporting winners over multiple rounds creates stronger long-term outcomes than excessive portfolio expansion.
The firm will be looking at sectors where sustainability is directly tied to strong commercial outcomes, such as energy storage, electric mobility infrastructure, waste management, climate-focused software platforms, and resource-efficiency solutions. It is also seeing increasing opportunities in sustainable consumer brands and businesses that are helping industries decarbonise while improving operational efficiency. “In India, climate is no longer a niche theme; it is becoming deeply linked to manufacturing, energy security, urbanisation, and supply-chain resilience. The most compelling businesses today are the ones solving real economic problems while simultaneously driving measurable environmental impact,” Bhammer said. The firm is also seeing growing opportunities in waste management and asset-light software platforms supporting climate-focused enterprises.
Green Capital has so far invested across electric mobility, agritech, sustainable consumer products, and energy transition, among others. Its key portfolio companies include Battery Smart, Revfin and Euler Motors, among others. “These startups have demonstrated that sectors such as EV infrastructure and clean mobility can achieve meaningful scale when unit economics are fundamentally sound,” Bhammer said.
Over the last few years, the firm has consciously slowed new investments when valuations became disconnected from fundamentals, especially during periods when generalist investors aggressively entered climate tech. Today, it believes there is a healthier reset in the ecosystem, with more realistic pricing and a stronger founder focus on execution. “That environment is creating better-quality opportunities for long-term investors like us who prioritise business fundamentals, governance, and sustainable scalability over short-term market enthusiasm,” he said.
Beyond Impact Niche
One of the biggest shifts in overall venture investing today that Bhammer is observing is the return of discipline. He believes investors are prioritising profitability, capital efficiency, governance, and execution quality much earlier than before. Another major trend he has observed is that climate tech is increasingly being viewed as core economic infrastructure rather than a niche impact category. At the same time, he has observed that AI has absorbed a significant share of investor attention and capital globally, which has temporarily reduced momentum in sectors like climate tech. “However, we believe this is creating attractive long-term entry opportunities because businesses with strong fundamentals are now being built in a far more rational funding environment,” he said.