Theia Ventures Fund I

Theia will invest in B2B Indian companies that have an innovative IP in climate technologies; The Fund will construct its portfolio by originating along the following 3 broad sectors:

1. Mobility, Energy Systems & Fuels (c.50%): batteries, alternative fuels (green hydrogen, energy trading & forecasting, carbon capture utilization & storage, direct air capture, sustainable air fuels) innovations, which are primarily in the climate mitigation category.
2. Food, Materials and Circular Systems (c.30%): Biotech, agri-tech, synthetic biology, supply chain traceability, food systems and circular economy solutions, which have a larger A&R application
3. Industrial De-carbonization (c.20%): Climate risk and insurance, industrial IoT, sustainable construction, wastewater treatment & energy efficiency solutions, which can cover both mitigation and A&R

90% of the Fund is expected to be invested in climate mitigation. 10% of the Fund is expected to be invested in dual category of climate mitigation & adaptation & resilience.

Economic Enabler (EE): with a focus on B2B business, we expect >50% of the Fund to be invested in companies that qualify for EE. Across the 9 investments in Fund 0, 96% of capital was invested in companies qualifying for EE.

India

Despite India's ambitious climate goals, its early-stage climate tech ecosystem faces a significant challenge due to a lack of risk capital. While there has been substantial growth in funding for renewable energy and electric vehicles, other crucial sectors like sustainable food value chains, water management, and energy efficiency struggle to attract investments. By 2030, these sectors will require over US$ 500 billion in investments, highlighting the need for broader venture capital and private equity involvement.

India

We expect the Fund to have a low-income reach of 30–50%.

The GP has set an aggregate target for the Fund to abate 57 Mega tonnes of CO2e over its 10-year lifecycle.

It is difficult to assess the expected scale of impact on adaptation & resilience at ex-ante, but we will monitor this through a DI Monitoring Plan at ex-post.

Theia’s 100% Climate Fund will back 18 companies working across mitigation and adaptation & resilience. Theia’s early-stage investment will help the companies scale their IP climate technologies at scale. However, considering the nature of early-stage investing, it is difficult to predict the nature of depth and duration of impact.

Medium. We are playing the role akin to an anchor investor in Theia. As a first-time manager, Theia has not received interest from any other commercial institutional investor given the small size of the Fund and the riskiness of the strategy. Having secured only $7.4m from HNIs and family offices, BII’s $5m investment will help Theia get closer to its target fund size.

Execution Risk

High. As a first-time GP investing across nascent sub sectors, we expect high execution risk, which is also aligned to the commercial risk. Theia’s 9 investments in Fund 0 showcase the GP’s ability to win competitive deals aligned with impact strategy.

Evidence Risk

Medium. Proving depth of impact in climate investing will be difficult, especially amongst early-stage companies where the theory of change is indirect & long. We expect to mitigate some of these risks through a DI Monitoring Plan. Additionally, Theia’s own tech-DD as part of its investment thesis can mitigate some of these risks.

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