Caret Capital, an early-stage VC fund focused on sustainability, has raised over 160 crore rupee (US$18.7 million) within six months of its launch.

Backed by Bajaj Auto, TCI, and a major US-based foundation, the fund is targeting a total corpus of 400 crore rupee (US$46.7 million).

It invests in sectors like smart mobility, supply chain, and job creation, aiming to reduce 10 million metric tons of carbon emissions and create 10 million jobs.

The fund will soon announce four new investments: a subscription-based electric two-wheeler platform for gig workers, a battery lifecycle management firm, a livestock feed distribution startup, and an AI-powered SaaS platform for carbon emission tracking.

The firm, led by Pankaj Bansal, Karan Mittal, and Prajakt Raut, has backed 27 startups, including Celcius, Unstop, and Awign.

🔗 Source: Caret Capital

🧠 Food for thought

1️⃣ India’s venture capital ecosystem rebounding creates favorable climate for thematic funds

Caret Capital’s successful fundraise comes amid a broader resurgence in India’s venture capital market, which saw funding rebound to $13.7 billion in 2024, representing a 1.4x increase from the previous year 1.

The number of deals across the Indian VC landscape increased from 880 in 2023 to 1,270 in 2024, marking a ~45% growth, with small and medium-ticket deals (under $50 million) constituting about 95% of all transactions 1.

This fundraising momentum has been supported by favorable policy reforms, including the elimination of angel tax and simplification of foreign venture capital registrations, creating a more conducive environment for specialized funds like Caret 1.

The Alternative Investment Funds sector in India has demonstrated remarkable growth, surpassing ₹7.5 lakh crore (USD 100 billion) in total assets under management with a CAGR of over 20%, signaling strong institutional interest in alternative investment vehicles 2.

2️⃣ Sustainability-focused venture capital still nascent in India despite massive growth potential

While Caret Capital is gaining traction, the sustainability-focused investment landscape in India remains relatively underdeveloped, with Green Frontier Capital being noted as “India’s first investment firm” specifically targeting growth companies in green industries 3.

India’s ESG focus is growing rapidly, with expectations of exponential growth in ESG-compliant funds, particularly in renewable energy and clean technology sectors that align with Caret’s investment focus 2.

Caret’s thematic approach addressing mobility, supply chain, and jobs coincides with India’s national priorities, as the country aims to become a significant player in the global supply chain by 2030 4.