The newly launched sector will focus on accelerating the growth of start-ups with sustainable business models.
IA plans to acquire eight to 10 high potential circular economy start-ups by the end of FY25 and fund them through the multi-stage Finvolve fund.
As part of its future-proofing efforts, India Accelerator has announced the launch of a new theme, “Circular Economy,” aimed at catalyzing the growth of potential startups in this space. The theme aims to support startups germane to sustainable business models, waste reduction, energy efficiency, and climate change.
Based on a strategic approach, IA’s new theme will be India’s only dedicated accelerator programme to support the burgeoning circular economy. The sector will provide an extensive growth framework for startups in clean energy, e-waste recycling, lithium-ion battery manufacturing, biotechnology and decentralised water treatment. As part of the launch, IA will allocate INR 150 crore per startup through Finvolve Accelerator Fund to scale up their operations and $500,000 per startup through Finvolve Seed Fund to support growing startups that are ready to scale.
Expressing optimism about the announcement, Deepak Nagpal, Managing Partner, India Accelerator said, “The global opportunity for circular economy is expected to reach $4.5 trillion by 2030. Adoption of circular economy practices in India can generate savings of over $624 billion by 2050 across food and agriculture, construction and mobility. With a widening demand-supply gap and over-reliance on imports to meet energy requirements, the circular economy opportunity is inevitable. India’s leadership in technology and innovation creates an opportunity to accelerate the transition to a circular economy, especially given the growing cultural acceptance of circular practices. Our recent initiatives aim to promote responsible consumption and production and foster the growth of these startups.”
Elaborating on the agenda, Ashish Bhatia, Founder and CEO, India Accelerator, said, “The future of economic growth lies in sustainable practices and circular economy principles. But this transition requires extensive planning at a macro level. The new theory aims to bring together startups and key stakeholders to redefine resource utilization and focus on building a renewable future.”
India is on its way to becoming the world’s third largest economy under Prime Minister Narendra Modi’s vision of “Atma Nirbhar” (self-reliance). These initiatives will mark the beginning of India’s rapid economic growth that is inclusive and sustainable. Moreover, the Prime Minister’s post-budget 2023 speech emphasised on making circular economy a key tool for urban development. As India is primarily a resource-intensive economy with a rapidly growing population, IA’s new initiatives will help establish India as a global leader in circular economy.
As a springboard for circular economy theory, IA has already invested in sustainability startups such as eMines, Bonphul, Trashnet and Recycle Green. These startups are building advanced biofuels and green technology solutions, robust e-waste recycling systems, decentralized water treatment systems, plant-based leather and biomaterial solutions. “The investment agreements in these startups underscore our commitment to understanding the application of innovation and technology to recycle and reuse waste in an environmentally friendly manner,” Deepak adds.
By January 2024, IA had 225 startups under its umbrella, two-thirds of which had successfully raised follow-on funding. IA has helped roughly one-third of these startups exit, generating healthy investment returns over the past six years.
Apart from this, IA has specialisations focused on growing startups in various niches such as RUMS for Robotics & Unmanned Systems, Energy & Mobility, Generative AI, Media Entertainment & Gaming etc. The move towards setting circular economy as a new focus will drive the growth of circular economy startups, providing them with access to a collaborative growth ecosystem, funding opportunities and resources for their market capture and expansion process.
