Venture capital (VC) fund Synapses, founded by IIT alumni and veteran investors Ruchira Shukla and Karthik Chandrasekar, on Tuesday launched its maiden investment vehicle, targeting a corpus of $125 million to invest in the climate and healthtech sectors.
While Shukla was earlier the Head for South Asia, Disruptive Technologies – Direct Equity and VC Funds, at the International Finance Corporation (IFC), which is the investment arm of the World Bank, Chandrasekar ran his own fund Sangam Ventures that also clocked investments in the climate sector.
Synapses aims to fill the gap between STEM (Science, Technology, Engineering and Mathematics) ingenuity and commercialisation, the co-founders said in a media statement.
Unlike most deeptech funds in India that have a broad cross-sectoral scope, the fund’s investment thesis is to back STEM startups that tackle pressing climate and health challenges.
“The companies Synapses supports will go beyond digitisation-based business models, building STEM solutions that have a strong value proposition in global markets beyond India,” the firm said in a statement.
This goes on to signal how investors are increasingly evincing interest in startups building for the global market.
“There is where the scope lies…Shukla had earlier told DealStreetAsia in an interaction, highlighting how “India with its rapid pace disruption and innovation is uniquely positioned to build solutions for the world.”
“We are nurturing a new generation of audacious, path-breaking innovators and helping them build leading global technology businesses to deliver outsized financial returns,” she said.
Given that climate change and an increasing disease burden are the defining challenges today, venture capitalists are increasingly making a beeline to invest in the sector.
According to research firm Venture Intelligence, as many as 13 climate-focused funds raised $719 million in 2023, while six funds raised a whopping $989 million in 2022. This was way higher than the $90 million raised by two climate funds in 2021 and 31 million by one fund in 2020.
“The climate tech and healthtech solutions needed today sit at the intersection of STEM-innovation and agile as well as resilient, future-ready, infrastructure-like solutions that need to be deployed at utility scale,” said Chandrasekar.
According to the Climate Policy Initiative, India needs over $170 billion every year in climate finance to meet Nationally Determined Contributions (NDCs) under the Paris Agreement.
Meanwhile, in terms of the healthtech sector, factors such as the amalgamation of high Internet penetration, seamless payment systems, and demography are expected to push the industry forward.
India’s healthtech sector was valued at $11 billion in 2022 and is expected to grow at a robust CAGR of 26% to touch $67 billion by 2030. Currently, there are more than 10,000 healthtech startups in India with over 1,100 being funded.
