GEAPP Plans VC Fund To Back Indian Clean Energy Infrastructure Startups

By Saurabh Kumar on 26 Oct 2023

The Global Energy Alliance for People and Planet (GEAPP), a philanthropic platform founded by the Rockefeller Foundation, the Ikea Foundation and the Bezos Earth Fund, is looking to start a venture capital find to back green energy startups in India, a senior executive told VCCircle. GEAPP, which was set up to work in areas of climate change and energy transition, is set to invest $1.5 billion and is bringing in marquee global institutional investors who are likely to pump another $10 billion. As part of its investment programme, GEAPP also plans to raise a $10-15 million VC fund to back infrastructure-based clean energy startups, Saurabh Kumar, India head for GEAPP, told VCCircle.

“India has a vibrant startup community. But if you drill down, as far as startups are concerned, you will find
that the money of the venture capital funds goes majorly to tech startups,” Kumar said while explaining the
rationale behind the VC fund. He said that, overarchingly, the GEAPP has three major goals—reduce greenhouse gas emissions, create green jobs and increase access to commercial activity.

“A VC typically comes in, gives Series A funding and in three years’ time, makes about two-three times the
money and walks out. In a clean energy infrastructure-based startup, you need to be patient because the
returns will only come in eight to 10 years,” he said. Dubbed the innovation fund’ the new vehicle will look to invest in four or five companies, which are being
shortlisted from a group of 200 startups in the green energy infrastructure sector.
“We have just completed an innovation challenge, where we put out four problem statements and asked
innovators to come and give their solutions. We got about 200 entries and from that we will soon decide
upon the best four-five,” Kumar said, explaining how the investee companies will be chosen.

Kumar said that GEAPP will take the maximum risk on its capital and will bear the first loss in case a
business is unable to make money and goes under. “In this innovation fund… we are going to put our
money in the capital stack. But our money will be the first loss. If there is a loss, we take the first hit,” he
said.

In effect, GEAPP will act as a facilitator of capital for other multilateral lenders such as the Asian
Development Bank, the World Bank group’s International Finance Corporation and British International
Investment. These institutions are among the 20 investors who intend to bring $10 billion as co-investors,
Kumar said.

Seeking LPs

Kumar said that while GEAPP will act as the general partner (GP) for the VC fund, it will look to
leverage about $100 million from other limited partners (LPs) for the vehicle.

“We are in the process of selecting a fund manager. Once we select the fund manager, then we look out for
other LPs,” he said.

He said that GEAPP was looking to raise money from LPs outside the country. “This is the first fundraising
that we are doing in India, but we want to take this outside India as well. So, we are open to having LPs
that are interested in markets like Southeast Asia and Africa,” he said.

GEAPP, which operates across seven countries, counts India as its most important market. Kumar said,
that while GEAPP is a philanthropic organization and, as such, has no return expectations, the VC fund will
look to generate a positive return, which will be ploughed back into it.

“If there is a return after three years and there is an exit option, we will not take the return, we will just take
the money out and our return will be shared by the other investors,” he said.