Sunday, May 29, 2016

ECO STARTUP SPECIAL........................ Why these startups are GOING GREEN

Why these startups are GOING GREEN


It's Not Just Saving The Environment That Clean Tech Startups Are Aiming For. They're Also Building Sustainable Businesses That Turn A Regular Profit

A dead laptop. That's what turned Rohan Gupta and his brother Nitin into champions of clean tech nology . In 2006, when Ro han's laptop stopped work ing, he and Nitin didn't know what to do with it. “We wondered where all discarded electronics went. We didn't know how to dispose it off in an environment-friendly way ,“ says Nitin. They had no background in e-waste management but discovered that less than 1% of the country's e-waste was being recycled and were appalled by the gravity of the situation. So, they started Attero Recycling, an end-to-end electronic and electrical goods management service, in Noida in 2008, one of just seven companies in the world doing this.
Environmentally-conscious entrepreneurs like the Gupta brothers are using clean technology to create a green future.These entrepreneurs are building sustainable businesses that build eco-friendly products or help companies reduce their carbon footprint. “Anything produced in a sustainable manner or with less environmentally damaging materials while using technology is a clean-tech company ,“ says Kunal Upadhyay , founder, Infuse Ventures, which has a fund dedicated to earlystage clean technology companies.
NEW SOLUTIONS
Mumbai-based Green India Building Systems (GIBBS) is using geothermal technology to replace traditional methods of air conditioning in commercial buildings. Usually, air conditioners in commercial buildings are water-based and the cooling tower releases a lot of heat and energy into the atmosphere. In a tropical country like India, where temperatures touch 45 to 50 degrees Celsius, an air conditioner gives off a lot of heat, explains Arun Shenoy , who started GIBBS with Mandar Kaprekar in 2010.
Using its geothermal technology , GIBBS installs cooling equipment underground and uses ground temperature, which is usually in the range of 20-26 degrees Celsius, to cool buildings. The initial investment is higher but the savings are large, he says, adding that they have reduced water consumption in 75 companies and educational institutions, including Sanjiv Goenka Group, Tata Communications and Indian School of Business, and cut electricity use by 20% and bills by 25%. “The savings are massive. An IT campus saves up to five lakh litres of water a day using our geothermal technology ,“ says Shenoy .
Venture capital firm Blume Ventures has invested in three such companies, says managing partner, Karthik Reddy , and gives the example of Threadsol, which provides solutions to the garment industry . Started in 2013 by Manasij Ganguli, Mausmi Am bastha and three other friends, Threadsol has developed software to reduce fabric waste in the garment industry . For most garment manufacturers, 70% of the operational cost is in procuring fabric and 10% of fabric purchased is wasted. This waste, by default, ends up in landfills. Threadsol aims to save this 10% with a simple algorithm that can be used by a factory worker to cut wastage. “ All apparel manufacturers buy the incorrect amount of fabric for 93% of their orders. For a small garment company with a thin profit line, this 10% can add to their profitability ,“ says Ambastha, who did a postgraduate degree at NIFT.
FINDING FUNDING
Just being green, however, is not the main mission for these startups. Many are profitable and are doing the balancing act of being a sustainable business model and an environmentally-conscious company .
“You can't build a real business without being financially stable. If you are not profitable, you are not creating an impact,“ says Vivek Subramanian, founder, Fourth Partner Energy , a company that provides rooftop solar panels to over 50 industrial units across 17 states. The company , which started in 2010, turned a profit within a few years and its revenues touched Rs 50 crore in 2016.
Threadsol broke even in its first quarter and makes almost $500,000 every quarter. Attero too has been profitable for the last three years. The company mines precious metals such as cobalt, gold and copper from electronic waste and sells the refurbished metals online.
But there is another reason these startups have been forced to push for profitability -the lack of easy funding. “From 2010 to 2013, `power' was a bad word. Most bankers wouldn't talk to you. We struggled to get working capital when we started,“ recalls Subramanian.
Upadhyay, who has invested in both Fourth Partner and GIBBS, thinks most investors don't actively participate in this space due to the long gestation period and the policy risks. Data analytics firm Venture Intelligence says only 40 companies in the space have been funded in the last three years, and most of them are big companies that started operations before 2007.
CUSTOMERS PLAY HARD TO GET
Customers are also hard to win over. “The entry barriers are high,“ says Shenoy . “For the first two years, we met high-energy sectors like automobile and pharmacy to convince them to use our service. The first question was always, will it be commercially viable and what is the payback period.“ GIBBS had to introduce a buy-back option for the existing equipment to convince customers.
Attero's Gupta says many corporates don't care about the environment. Although they have clients like Apple and HP from whom they collect electronic waste, it is not top priority for many companies, he says.
Threadsol says 90% its customers are outside India. “The market here is not focussed on adopting technology and is not forward-looking,“ says Ambastha.
Unlike some of the other sectors, it's easier to turn a profit in this space and the government is getting involved too.Infuse Ventures has partnered with the ministry of new and renewable energy to fund the startups.
Ritu Verma, co-founder and managing partner at seed fund Ankur Capital, adds that slowly but steadily the demand for these products will increase. It has invested in a waste management startup called Daily Dump. “It's still not at mass demand stage, but it's growing and there will be a time when society will need to look at sustainable solutions to every problem,“ she says.
Shalina Pillai

TOI22MAY16

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