Aniruddha Sharma on hopium, the need for more competitors in the carbon capture industry, and taking long-term passionate risks for the planet
- Episode 3
- Reading Time
- 34 minutes
In conversation with Karthik B. Reddy of Blume Ventures, Aniruddha Sharma of Carbon Clean talks about how he bunked IIT exams to walk the lanes of Sand Hill Road, the personal tragedy that influenced his decision to build in the climate tech space, and what made him stay the course even when there was no venture backing.
This transcript was AI-generated and went through multiple rounds of proofreading. However, there might be a few errors that may have slipped through the cracks.
Karthik Reddy: Today, we have, Aniruddha, one of the co-founders and now, the CEO of Carbon Clean. Phenomenal story! It's a fund one company of Blume's. We met him even before we had raised our first dollar back in 2010. Introduction by who I think both of us think is a crazy professor out of Switzerland, Profess Martin, who said you have to look at these two young men from IIT KGP. They are going to conquer the world and we were intrigued cause we were also young as VCs we met them in a hotel lobby and the rest is history hopefully. Not that the two young men would not have built Carbon Clean with or without Blume, but I think we are fortunate to be a part of that journey. One of the only Indian investors in that journey.
Nobody in India necessarily believed in this story playing out globally, and we participated in that very first round and miraculously, the company did not raise a single dollar in equity for five years. Went on to get some love in the UK, which is where Aniruddha is joining us today from. From his lovely weather in, London, he tells me. Essentially from there, he started building European, Pan-European, and a global company. And today, we are over 12 years into that journey and kind of very symbolic of this series that we launched around X-Unicorns. He typifies everything that this unconventional path of building a unicorn signifies.
It is a pleasure to have you Aniruddha. Welcome to the show!
Aniruddha Sharma: Thank you, Karthik.
Karthik Reddy: Would love to sort of have the audience hear a lot of your story. So I think, maybe, this itself is a great kickoff point, something that most people do not know. Aniruddha was still at IIT Kharagpur, and bunked his final exams and ran away with Professor Martin to some corner of Silicon Valley and maybe that is where we want to start. Tell us why that happened, how that began, and how that began the journey of Carbon Clean.
Aniruddha Sharma: Absolutely, Karthik, first of all, thank you for having me here. It's great to come back and to almost relive our story and tell the audience about what has happened in the past 13 years for me, and 12 years for you.
The question around what happened and what did we do and going to Silicon Valley. Back in 2009, when Karthik and, we started this business, this company, we were trying to do a bit of consulting. That was our model initially. Let's go and get some consulting done we actually got a couple of clients as well.
But very quickly we realized that no one wants to get consulted from 21-year-olds, number one. No one wants to pay them at all anything. So, we met Professor Martin Henning from Stanford and he said, it was a wrong business model. You need to change the business model and focus on the technology. So, he took us to Silicon Valley to validate the idea that technology is actually much more important and interesting than consulting. I mean anyone can do consulting. We landed in Valley and Martin be Martin where he arranged meeting with Vinod Khosla, Kleiner Perkins, and maybe a couple of other people as well on the Sand Hill Road, the famous road of one stop other dealer stuff. So, I think we spent like two days on the road and then a couple of meetings in Stanford with professors and some of the angel investors.
Really one thing that came out from that whole meeting, the whole set of like three days or four days we were there was, everyone was excited about technology. If you can actually bring a technology that changes the world, that idea or even the concept of an idea is much more valuable in the valley. And that's what we said, Okay, we need to focus on technology. We have a great idea how we could actually see in the world today. So we said, let's start working on it.
Karthik Reddy: And when you say you went to consult, is this came out of your college education as a project which you thought you would implement in other companies or as you said, you would build out a product.
When did that morphing happen? I mean, this valley trip changed everything for you?
Aniruddha Sharma: It did. The whole idea came from Prateek's internship in Italy where he actually worked with a large industrial emitter, gushing a lot of CO2 up in the air. He worked with them to capture carbon dioxide. He came back to India and then, he had this brilliant idea of how do we reduce the cost of carbon capture, which is the process of extracting CO2 from the smoke stack of industrial emitters.
I connected with him over coffee conversation and I said, Well, okay, what are you working on? He said, I'm working on this. And I said, Well, why don't we do it? And that's really how we started. But because, I would say, we were just not primed or we thought it is too difficult, we thought let's do some consulting because the idea is there, the product is there, what we may do.
Consulting just sounded an easier option because you have to go and sort of sell your ideas and you write interesting reports on all that. So, we thought it might be easier and that's how we started. But very quickly, I realized that it is just not possible to do consulting in a climate where people do not necessarily value or at that point in time, did not necessarily value climate emissions or carbon emissions reduction technologies. So, it was quite difficult.
Karthik Reddy: But then you did the crazier thing, right? You thought you could actually raise equity capital and actually build out a company as 21- or 22-year-old, actually convincing corporates to implement something which is far more expensive and theoretically save the planet from carbon emissions. How difficult was that journey? Or looking back, was that all naivety or was that genius to pursue that path at that?
Aniruddha Sharma: I mean, to be honest, I would say, it was quite a lot of naivety that you can actually go and get it done. It was quite naive, but you know, we think about it looking back at that point time, 2009, so we registered our company in October 2009. That was the time the financial crisis happened, and our seniors from the university, from IIT KGP going into the job talked about a lot of stress and how it was difficult, a couple of other things. So we said, look, I mean, if we have to take a plunge now, it's probably the right time.
Although personally, my family disagreed with that because I come from the family of civil servants and bureaucrats. So for them it's like job 9 to 5, get married, have kids, get old, retire. That's what a couple of generations had done.
Karthik Reddy: Yeah.
Aniruddha Sharma: So for them, the idea of not taking a job from IIT and starting my own business was just bonkers. They were like, What? Are you crazy? My mother even cried? You are never going to get married. You will never find a good girl. Like the mother's ambition in India is. So she even cried and I was like, look, I mean, I can always get a job but I'll have to probably sort of slog for a couple of more years, but I can always get a job. This is the right time that the central idea remained the same, which is if we have to change the world, now is the right time. One crisis leads to a solution that is solution for some other crisis or bigger crisis and we said, look, I mean this is one crisis, and this is now the opportunity.
When people will come out of this crisis, they will probably be much more stronger, and they will be much more interested in resolving this. So we said, Okay, yeah, let's go ahead and start the tech company. I also would say that Serendipity had a big role to play in that. We got connected to Dr Avinash Patkar, Chief Sustainability Officer at that point of time of Tata Power, PhD, chemical engineering. He had worked in the US all his life. He knew a lot about what we were trying to do and he said, "Guys, this is interesting." So that validation point was something that told us that if we could do this there, there will be users on the other end.
Karthik Reddy: So you touched upon 2-3 important things for an entrepreneurial journey.
One, I think you talk about this ray of hope that you got from, Dr. Avinash. That I think is what an entrepreneur keeps grasping to. Can I be fed more hope to survive another year, another year and another year? Because if you think about it, I mean, they say a crisis is a great time to build a business and you started off just after the crisis with dreamy eyes of saving the planet and reducing carbon emissions. And it took this crisis 12 years later, beginning of the pandemic, or 11 years later for people to realize that we are actually, going to screw up, and lose a lot of time if we don't fix carbon emissions right away.
If you look at the most transformative years in 13, they've been in literally the last two years for you. Again, if, someone had told you with a crystal ball that this is how long it would take and this how it would play out, would you have stuck on and what are those hope points maybe in this journey, maybe to quickly sort of give the audience a flavor of this entire journey? What are the hope points you picked up? You started with one person in Tata Power saying, I think this could work. And you are here 2022. What all was required to inject hope into you?
Aniruddha Sharma: Yeah, no, I mean that's a good point. Hopium is very, very important for entrepreneurs, I would say. You have to live and survive on it.
I would say first one was after Patkar saying this is interesting, 2010, and 2010 was the time when Blume Venture is invested and you know, there's a whole story behind it. So, we connected with you and some other investors coming together and saying, Oh, yeah, this looks interesting. Here is a million dollars go ahead and do. 2012, the British government saying, Oh, we like this thing and giving us $6 million. That was another hope point. 2014, launching our first product commercially in Germany. 2016, building our first large scale plant in India. 2018, launching the next generation technology, which could reduce the size and the cost quite significantly. 2020, raising Series B round and then obviously now where there is a whole new debate around climate change, there's a lot of enthusiasm, a lot of people committing a lot of money and obviously, we've raised our Series C round as well. So, I would say those are a couple of the points where we got some hopium.
Karthik Reddy: Super! Similarly people ask what made do you think you should be investing in something as crazy as Carbon Clean and that too sitting in India. And we get this question a lot because not that we had a playbook for folks like you but we had a handful of folks who had no chance, even I think we were not naive to believe that this could be a large Indian business. It had to be a global business. But we were naive to think that, with our end of the idealism spectrum, there was exactly what tech entrepreneurs like you dream of. Stay hungry, stay foolish. So, we want to think much like the Sand Hill Road folks and say, we are funding path-breaking, world-changing technology.
We realize that that's not actually very easy sitting in India. So we do hedge. I have to admit. I don't think we do more than 10%-20% of such investing in any fund cycle. So, you feel, I always used to brag that we have this cool deep tech portfolio on the side and Carbon Clean was one of them and that it jaded because you guys were not yet recognized or lauded in the popular media as a success story
It takes a long time to build those success stories and when I think about it now, I feel like this is what India in some sense needs and I hope someday you will become the role model and poster child for this, that deep tech can be built out of India. But I think we need a formal form of acceleration of deep tech companies out of India. If you just leave it to chance and fate, then you know you have to get lucky with the British government thinking you're worth punting on with grants
And I know even that happened by serendipity when somebody made that introduction. What if they didn't? And, I feel, this is where we can take Indian deep tech companies and they will all look like X-Unicorns. Nobody will think that an Indian company can win the next prize that Google launches or actually become a world beating company in terms of technology, whether it's saving the planet or whether it's something else. I think, when you don't have that kind of structured acceleration, then the go to market becomes awfully slow. Which is always a sort of worry about Carbon Clean and will it get there? What are the stroke of luck do you need to get there? But it's commendable that you guys take the course.
Which brings me to the point of what about both you and Prateek? Of course you had each other, but what is it about both of you that loved you to stay the course? It's very tempting. You would have said, Hey, this is staying too long, if not a job. You've seen founders all along the journey who sell the business because it's very tiring. It's very difficult. There are enough strategic who think and I am sure, you got approach many times across the decade. So that's the other thing about X-Unicorns, meaning they have survived all of these temptations as well. You could've sold the business, you could've gotten out, you could've told the investors, Sorry, we tried hard. So what made you believe that you can actually continue to evolve as the CXOs and build a very, very large business?
Aniruddha Sharma: So it's a good question, Karthik, and I think at the end of the day, it comes down to personal motivations. Because you can't do something for 10 years, I would say, even 3 years or 5 years unless you're like motivated out of it, and you can get out of bed every day in the morning and say like, this is what I want to do. And it's generally getting out of bed pretty early in the morning, 5:30 or 5:40 every single day. So, that kind of thing wouldn't happen until or unless you have some kind of personal motivations sitting behind it and both Prateek and myself, we are very, very motivated and very passionate about climate change. We believe the problem we are solving must be solved and there are just not enough solutions out there to be able to resolve the climate change and global warming problem we are walking into.
For me, this is also a bit more related to my family. So, I was born in a town that is famous for wrong reasons, was born in Bhopal, that's famous for the Bhopal gas tragedy. Thousands of people died because of that unfortunate incident and I actually grew up listening stories about that incident in the family. My father inhaled the gas, so he has developed a certain condition within the stomach lining and all that.
So, I think there are issues that I've seen just very, very up close and that really gave me help formed my view that one industrial process at one location, uncontrolled did this. We have carbon emissions and CO2 going up in the air at so many industrial sites and locations, over 6,000 of them on a daily basis, uncontrolled. And if global warming, which is, what we are seeing already, wildfires all over the world, India, and the whole central region experienced the highest temperature, they see in the central belt. So, we are already experiencing this and now, there is literally no way of reversing this.
This is just one way street. So for me it's much more personal that the contribution I'm making could potentially do a bit to reduce that global carbon emissions and that's what drives me. And I know for a fact that Parteek has a similar driver and motivations as well.
Karthik Reddy: No Amazing. I have some reason despite knowing you for this long, I missed that small natural connection to maybe how Bhopal could have influenced this about you. And maybe you were too young or not born at that point. But clearly, we were around and we had seen the headlines. We have almost two decades on you in terms of age. And so you're absolutely right. I mean, these are so sensitive and within the plant everything is kind of calibrated. And I guess when you think of poison in the aggregate global atmosphere, you're calibrate it down to a plant level and people don't realize that what's happening with CO2 is probably the equivalent of carbon monoxide poisoning, but actually at a massively large scale and at a pace where everyone's in denial or used to be. Thankfully, I think we've converted collectively a bunch of these folks, but still a long way to go.
Aniruddha Sharma: Exactly, I would say, any problem becomes an extremely important problem or a personal problem once your family is involved. We've seen this during pandemic. Any family member hitting anyone within the family, everyone got extremely worried. In my case specifically, the gas tragedy happened on 3rd of December and the night my parents were to get married on the 7th. So the extended family tree, you know, as an Indian wedding, you have like people from all over the India actually come to one place, maybe 5 days in advance or 6 days in advance.
So, I had the extended family tree in Bhopal that day when this thing happened. So, it's not just, you know, Oh yeah. It's a news headline that I saw in Bhopal, living in Bhopal. It's literally like everyone in the family was there, in Bhopal that day. So it had a huge, huge impact on me.
Karthik Reddy: Yeah. Crazy story. But if it motivated you to give it a shot to and save the planet, I think it has served its purpose, at least in your life story.
And I know you've used this line before and you've said climate change is your biggest competitor. And I as a VC, I am not as someone who backed to, I'm not worried about competition from back then or even now because of the scale of the problem. This is one of those mega, mega markets where hundred solutions like a Carbon Clean have to be around to solve for the end stage problem.
That's the sense I have. But would love to have you speak to the audience here and talk about what are you seeing happening? Is there's sudden attention to this we care about SpaceX and oil companies that everybody wants, and everyone thinks they want to play a role, either they're green washing or they are not, but it doesn't matter. But everyone wants a ticket to looking good and clean today. So how does that affect your business going forward? And maybe with that, the narrative, you've completed the long, arduous journey of the first 10 years, what do the next 10 years look like? I mean, we will worry about what's post 2030, but what do the next 10 years look like for?
Aniruddha Sharma: So you're quite right. I mean, everyone is sort of jumping on the climate change board now and everyone wants to reduce carbon emissions and announce targets. I think to some extent, a lot of this is land grab, so people want to sort of go and say, Oh yeah, I'm in this is space, let me just go and grab this headline or this space and claim that I'm doing something here. A couple of reasons behind it. A, it's driven by the financial community. So you may have seen a lot of ESG indicators are there, a lot of climate change indicators that are there, there is TCFD protocol and people need to start reporting in the US, there is a CSF, you need to report on climate change. Similarly, UK, Bank of England said, tell us about your standard assets. So I think that's creating a level of urgency within the companies to come out and say, this is a big problem and we are going to resolve it, and this is what exactly we're trying to resolve. So that's the reason everyone is getting excited and everyone's getting in the hold.
However that said, the number of solutions that exist today to address the scale of the problem are just minuscule. It's literally kind of saying, the needle in the hay stack type of thing. I mean, if you think about heavy industrial de-carbonization, which is where we play and decarbonizing steel or cement or refinery, petrochemicals, glass, chemicals kind of things, you can't replace in a year or two year or three or five year, I would say even 10 year, decarbonizing that I think the number of solutions you have available today is maybe just three or four, capturing carbon like from the smoke stack, maybe using green hydrogen, maybe doing some electrification, and that's it. There's literally nothing out there that can help these companies resolve the climate change problems. So, I think that's really the reason why there is a lot of excitement companies today supporting them and taking them forward.
For us, past 10 years, time to date has been about developing the best technology, getting the best product, and then demonstrating it, scaling up, demonstrating it again. I mean, it's a hard tech stuff, so you have to build a prototype, kind of a table top, demonstrate it works on lab, build something a bit bigger, I would say probably 300-500 kg, something that weighs the weight of your car, demonstrating it on the field, then scaling that up to maybe 15-20 times demonstrating it again a hundred times, demonstrating it again. So it takes a long time to actually demonstrate the technology. We've done that. So, we have 44 operating sites globally that we are caption carbon site. To date, we have helped our customers capture over 1.5 million tons of CO2 to give you an idea. That is equivalent to taking about 8 million cars off the streets on an annual basis in terms of CO2 emissions. So, we've sort of done all of that and we've got people excited about the technology. So we have, in the latest round of investment we raise, we had backers like Chevron, Saudi Aramco, Samsung, TC Energy, Accent Investment Managers, Wave equity partners, coming in and saying, look, we believe in this technology and this company, and we are investing.
Now, for us next 10 years is all about scale up. We've got the technology. Now we need to face the challenge of scaling up and I'll give you an example of how big of a challenge that is. And that's the reason I say climate change is my main competitor because it's a ticking clock.
To give you an idea, the International Energy Agency, which is the premier body that does a lot of data collection, projection work on the global energy situation today, tomorrow, and 5 years, 10 years down the line, they have said that to be able to achieve 1.5 degree scenario, which is the surface temperature of earth, not heating more than 1.5 degrees, we must be capturing about half a million tons of CO2 on a yearly basis or we must be installing that capacity on a yearly basis from 2030 to 2050, literally every year, this much amount of capacity should come online. Now, the global equipment capacity to be able to meet that is about 1 to 1.5 million tons today.
Karthik Reddy: You said half a billion. Did I hear you right?
Aniruddha Sharma: Half a billion tons of equipment kit need to be installed. So if you think about the level of scale up, you need to scale up the global equipment, industrial de-carbonization capacity by anywhere between 250 to 300 times between now and 2030.
To give you a comparison, the whole world working together and expanding solar space between 2010 and 2020, we've only been able to expand the solar installation capacity by 16.6 times in 10 years. And here for industrial de-carbonization, we are talking about expansion of 250 times. And that's the reason I say, it doesn't matter if you have three other competitor, four or five competitor, 10 other competitors, 20 competitor, maybe 50 competitors as well, everyone will have to scale out.
Karthik Reddy: Yeah, you're right. There's like hundreds of solar players at massive scale. And you're saying that that didn't create more than 16X scale over a decade. So where's the worry about creating 200 times scale and it is inevitable that everyone will have to fix this. There's no getting away from this.
Aniruddha Sharma: Exactly. So I think from our focus, from our point of view is, okay, we understand our niche, we understand our customers and people who have the urgency and they like our product, what we do and they have said, Look, we want to come to you and we want to buy 50 units next year. We want to buy a 100 units in 2025. We want to buy 200 units in 2027. Our challenge is how do we start scaling this whole thing up? And that's exactly what next 10 years will be.
Karthik Reddy: Awesome, awesome! And, I think the first step to that was that obviously people did buy into this vision, and you've got, as you said, some phenomenal investors come in. I think they can take all your capacity between themselves or their partners or their customers. So there's no shortage of that. And 150 is a nice number to start with, but it's still probably a first step in raising a lot more money to be able to accelerate and get to the scale. And so very different path for you as a CEO going from, I don't know what the scale of the team grew from, just remind the audience and me, and what do you think it will be in that same 10 year journey now?
Aniruddha Sharma: So in the 10 year journey... 10 years back, 2012, we were 6. We are 82 now. We, in September, will be 94. So, by the end of the year, we should be about 120 people, and next year, we are planning to go to about 250. So double the company and the number of people again next year. So, we are almost sort of doubling. It was quite interesting in the middle of pandemic. So, we actually went double in the middle of pandemic and everyone was like, are you crazy? I mean, why are you hiring so many people? People are slowing down and people are thinking what their options are. So we doubled in 2020. We doubled in 2021. We will be doubling again in 2022. We are doubling again in 2023. So it's just a double growth. And for us, bringing these people is generally a challenge because it's such an intensive job that needs a very high qualification either as a masters in chemical engineering, process engineering, mechanical, civil, or a PhD in that or at least a work experience of 20 years or something like that.
It's a little difficult to find people who are that experienced or that qualifying.
Karthik Reddy: I was going to ask that. So there's two levels of difficulty, I guess. One is to get as many qualified people, but I'm guessing this is also going to become a global industry. There has to be an ability to petition enough folks to join the mission in multiple countries to come in. I wouldn't be surprised if Carbon Clean has four or five global outposts because the talent's not going to be all concentrated in London or Bombay or wherever you currently are at. That's one. And, associated with that, isn't there a second level challenge much like your own personal journey and mission, and I don't know this, but do you actually filter for a similar sense of purpose and mission when you hire, is everyone a climate warrior in your organization and is that the primary driver for them to think of Carbon Clean as opposed to any other job?
Aniruddha Sharma: Yeah, that's a very interesting question. I think you're quite right that we just can't find everyone in the same place. So we do have different offices. We have our headquarter in London. We have office in Mumbai, one in Singapore, one in Spain, and one in the US. So those are the main centers we have.
I mean, this industry is going to be, if it actually grows to the pace or even at the 10th of a pace where it's growing right now what needs to be, this industry will probably be equal to creating five companies of the size of Exon Mobile by 2040, world's largest oil and gas companies. So, it's a huge task.
I think to your point around what's that common thread that keeps people together? I mean, yes, obviously people are motivated and that's the reason people come in and join us. We have people joining us, taking a haircut on the packages. Committing a lot more time to us away from their families versus what they could have done or what they would've done in their previous jobs. So they obviously are passionate about building a company that is going to go and capture or deliver a billion tons of carbon dioxide emissions reduction. So, they're quite motivated by that.
But I would say there are four facets of our culture that actually binds people together and keeps them together. Everyone is sort of linked to the same thing, and those sort of things are innovation, collaboration, agility, and excellence. Four things, we actually, as a company, really pursue be it our product, be it our customers, be it our service, be it our team. Those are the four things we pursue quite hard and everyone is sort of bound by that same common thread.
Karthik Reddy: So those are the pillars, I guess, you're building your culture around. You don't have room for error in your business really. You're building scaled operations as you said, and it is no room for error in terms of how they function. So I guess when you have manufacturing process oriented industries, you have to build very, very tightly bound cultural constructs like you have. It's great to hear, and I guess couple of questions related to where you're at in that journey.
What do you think the next natural step for Carbon Cleaner is? Is it proving a little bit more scale and going and raising more capital? Is there a murmur amongst your existing investors and future investors and why aren't you public so that everybody can get a bite of what you're trying to build out there for the planet? I'm sure there are retail investors who are married and loved the idea of what you're doing, but really can't buy into you. So is there, like, is that a personal motivation to give people who are personally motivated to participate in this have a short at going public and owning a part of a public Carbon Clean? And related to that, is this like curious juxtaposition, like there are certain phenomenon on the planet where individuals move faster than corporates, but your customers unfortunately have to go through the rigors of board room approvals and large budget approvals to actually get this mission moving. Do you have any tricks up your sleeve to sort of accelerate this momentum? I can feel that way personally, but I might not be able to influence the 10 big customers that you need to change this next year. So just, thoughts around that would be lovely to hear.
Aniruddha Sharma: Yeah, like I said, I mean the next step for us is scale up. So we've raised around a capital of $150 million. Now, it's all about scale up. So, let's get out there. Let's start expanding. We expanding the team. We are bringing some very, very experienced people from within the industry. I mean some of the people coming in within the business in next 2-3 months have had the experience of running $6 billion of supply chain, have the experience of building clients that cost in excess of $50 billion, like one of the guys who has built that client.
So these type of people are now coming in, and I think it's just the right time for me to be putting what I call in the engine upgrade. So the plane has been upgraded. Now we need a new engine, so we now need a jet engine in the plane. So I think that is going on and we want to build that, let's say over next 12 to 18 months.
I think the overwhelming priority for the company at this point of time is to also deploy technology. So, we launched our latest third generation technology at Climate Change Conference last year in Glasgow, in October, where with the technology we are compressing the size of the equipment 10 times and putting everything in a box.
Now once you put everything inside a box, you can almost roll it out from production line a bit like Tesla and you can ramp up the manufacturing and supply and delivery and installation on site. So, I think overwhelming majority for the company, a priority for the company over next 12 to 18 months is to deploy, I would say, five to seven of these units on the ground. And we've announced some very exciting projects of examples you and we have a nice project with Chevron in San Joaquin Valley in California, capturing CO2 from one of their gas engines about 30,000 tons per year, and then permanently storing it to very, very interesting projects. Exciting project. And to give you an idea of scale, there are 25,000 of these units in the US. So if you capture 30,000 from one multiply 25,000, it's 750 million tons of carbon dioxide emissions that could be abated. So, we're very much focused on that. We have a nice project with Cemex, which is one of the world's largest cement companies, capturing CO2 from the plant in Berlin. And then eight months back, we started project with Tata Steel in India, in their plant in Jamshedpur capturing CO2 from a steel industry and decarbonizing that and showcasing the world that it's possible to do it, profitably and sustainably. So, that's the overarching priority, and we are going to be focusing on that in execute, deliver, execute, deliver, that kind of thing.
So your question around going public and kind sharing the growth with other investors, for example, retail investors, I would say that time for it will come but we are not there yet. I think we need to, build some more scale and continuity, and team to be able to deal with it. I mean, mind you, there's a lot of pressure once you go public, there's a lot of pressure. On your quarterly basis, you have certain strategy reporting requirements, so it just sort of takes the focus away from the management team and it's a different type of ballgame you enter. So I think we'll probably be waiting on that. No, wise word. I think, you should do it for the right reasons and I can see you thinking through all of the pros and cons.
Aniruddha Sharma: Exactly. I mean, we have experienced what happened with a lot of tech companies. You don't necessarily want to be just doing that for the sake of doing it. And then, to your point around a lot of our customers have processes, for example, broad process approval at management level, approval at broad processes, and then, sort of communicating that to the investors. So I think just a general public pressure and focus on doing something about climate change is now putting pressure on the large institutional shareholders of these public companies who would then go and ask questions in the boardrooms, and then it sort of flows down. So, a good thing is in past 18 months, I have seen that instead of we trying to push everything bottom up, stuff has started to actually percolate top down.
Karthik Reddy: Yeah, it's very encouraging.
Aniruddha Sharma: Definitely, helps a lot.
Karthik Reddy: But I think the biggest virtuous side benefit of the pandemic, I would argue by a mile, would be collective planets sort of consciousness shifting towards, we are all sitting at home, we are bound by like, this little virus, we are creating large scale problems which you're not even aware of. What else are those? And climate just sort of peaks out there as something that irrespective of what you do, what virus there might be, there is this widespread destruction and it's just waiting to get worse and worse. So, I would agree with you and kind of, I guess I had some questions around it, but we've touched upon most of them, but maybe we wrap up slowly with thinking around you answered it right at the beginning itself, why is there suddenly so much interest from an investor perspective? I think we covered that. Why do you think strategist are getting in? Is it just green washing or you've met a lot of these people in person? Do you think they're sincerely committed to now acting in the interest of the planet and actually changing their ways? Maybe that one you could answer for the audience, and of course it took a lot of global investors to believe in you.
Literally, there was no single country, there was no single market that could have actually made a Carbon Clean come to its full. In that context where we sit and I proudly say we are the only Indian investor in Carbon Clean and so where we sit, what would the message be for Indian VCs to actually have faith in the fact that we can build world class technology sitting out of India, and rather, do you think VCs, by the way, an aggregate level, global or otherwise, are actually backing fundamentally great technology, which is how the venture capital industry was born, rather than just fixing cute business models and giving them tags of EdTech, FinTech, HrTech, some other Tech. And so just views on that and then we'll wrap up because I think the reason I'm asking someone like you all of these questions is it's fundamentally why you had no choice but to become a mutant in some sense. And goes back to the theme of our podcast. You had no choice but to be an X-Unicorn. You couldn't have been a traditional, classical Unicorn and all of these are the impediments and any views that you would share as someone who's overcome all of them would be great for the audience and inspiration for others who are trying to follow in your footsteps.
Aniruddha Sharma: Absolutely! Someone told me long time back when I was starting up is if you want to be a technology company, especially a hard tech technology company, you go to America. That's the place where stock gets funded and it happens, and I think it's a statement that's still true. You know, 13 years I've been doing this, it's still true, actually. And simply the very simple reason there is most of the investors and investor community, yes, they're the funding the business models, but they're generally interested in building that is something that can actually change and it's not only a matter of money, it's also a matter of personal pride for them to say, I backed Sun Microsystems, I backed Google, I backed Facebook and I think it's a combination of two things. One is a lot of failure in the tech space has happened in the US, so people actually learn from all that experience, number one. And number two, which I found is most interesting is a lot of the VCs are actually technocrats in their previous lives or they keep switching between that. So, I think there's definitely a need, takes some more risks. I'm starting to see that now in India. I mean, we have a lot of companies, especially in companies like you, some of them you are backing as well, Karthik, where investors have started to take a lot more risk.
It's still kind of a portfolio approach to say, Okay, part of my capital goes to a risky technology or very risky business model. But I think that is a good step and it's a step in the right direct. I mean, I would say technologies that could potentially change the world or the way we live primarily, I mean, technology to change steel we use, or cement we use, hard tech. I think more of that investment and more of that support should be given because if you are able to create something in that space, then it's so unique. I mean, you're the only company in that space that can actually do that, number one. And number two, the barrier to entry is extremely, extremely high. To be able to get a project signed up with a large international Oil and Gas Company is a 16 month process. How many software tech companies, FinTech companies actually die in 16 months? So it's a long process, the thought process is just a bit long. So, I think that's quite important.
The second question around the partnership with large companies and they're not showing up and is it really interested or not?, I would say look, they have the biggest problem and it's quite evident to them. They have the biggest carbon footprint, biggest carbon portfolio. I think for companies like us, there is a big opportunity. It's almost think about, whenever I talk about this, I say, Look, my job here is the job of Fireman. It's a big fire and these customers, these large emitters, large oil and gas companies are probably the largest amount. So they are biggest fire. So as a fireman, my priority would be to go to the biggest fire and deal with it at the first instance. So that's the reason we want to work with them, and we want to ensure that that problem gets sorted quickly enough before it actually starts spreading in other sectors as well.
Karthik Reddy: Very valid point. I think people either saw it as small fires or just a spark and didn't realize this could cause a massive, massive forest fire to continue with your analogy. And now it's a blazing fire, and I think you're being called in and it's better late than never as they say.
Just to your points, I wanted to react and actually, give credit and a shout out to at least half a dozen Indian managers who are actually setting up pure deep tech funds right now and maybe half a dozen, tech entrepreneurs who've made hundreds of millions of dollars through exits thinking about it. So I think it was cyclical. I think it was also a lack of faith at one level. We have been pushing the government to say, you should be proud that this kind of technology is going global and you should facilitate it. You should not put blockers on that. So challenge and taking capital out of the country, investing in Aniruddha out of London, it's not easy. We still can't do it easily and so I think they have to recognize that if we really want to be a technology super, you can't put all sorts of roadblocks in that journey.
The company will get built irrespective, and we want to be seen as the company having incubated, accelerated, and spun out these great technology solutions. So, we are pushing on all fronts, but I think sea change from a decade ago, hoping the next decade really puts us on the map and gets us closer to that Silicon Valley idealism and ambition of building fundamentally the world's best technologies. At least, we have a our fair share of that for the amount of intellectual horsepower that we have in India.
Thanks again. Before we wrap up, by the way, wanted to do this fun section of rapid fire questions and just, in one line, two line, whatever, however you want to answer them. And just, maybe the audience gets to know the Aniruddha Sharma, not the climate warrior alone and not the soon-to-be Unicorn founder alone, but a little bit more about you as well.
So, shall we go, shall we get started on that?
Aniruddha Sharma: Yeah, sure. Absolutely.
Karthik Reddy: What would be your last meal?
Aniruddha Sharma: Kheer.
Karthik Reddy: Kheer. Okay. We know what to serve you when you visit Bombay Office next.
Karthik Reddy: Current book or favorite book of all time.
Aniruddha Sharma: My experiments with Truth - Mahatma Gandhi.
Karthik Reddy: Very nice, very idealistic. Speaks with volumes of who Aniruddha is.
Karthik Reddy: Best piece of advice you've gotten, you think?
Aniruddha Sharma: An entrepreneur once told me, as a successful entrepreneur, you could either be rich or famous, choose one! Don't try to do both!
Karthik Reddy: Very fascinating. We actually used what we picked this up from some entrepreneurship study we saw and we call it the rich versus king syndrome.
Aniruddha Sharma: Exactly.
Karthik Reddy: Very similar, but it applies interestingly at different points in time, different entrepreneurs journey. And what are you by the way?
Aniruddha Sharma: I would probably go with rich, who wants to be famous.
Karthik Reddy: Interesting. I mean, failures are always tough, but what is a favorite failure? Those are the ones I guess you overcome and have a fond memory of what would that be in your case?
Aniruddha Sharma: Three years back, I think I failed to attract one of the star sales manager from my competitor into the business. I would say that's my favorite failure.
Karthik Reddy: Why is that?
Aniruddha Sharma: I learned so much from that, so much from that. I think just as you're young and you're motivator and you are running hard at it and sometimes you just forget what the personal motivations are for people.
Karthik Reddy: Got it.
Aniruddha Sharma: So I think I miss just the motivations at that point of time and I just learned so much from that experience about hiring, getting great people in. I would say that's a failure.
Karthik Reddy: Awesome! You much needed as you launch into the next decade and most memorable customer moment or feedback that you got from some.
Aniruddha Sharma: You saved my life.
Karthik Reddy: Oh, wow! And that came from, if you, don't want to disclose the name, what kind of person said that and what is the context?
Aniruddha Sharma: Yeah. So, our products are also used for producing bio-methane. So in Germany, a big portfolio of our project product is used for producing bio-methane from biogas, which is injected. So, and if you don't inject the right amount of methane into gas grid of Germany, you get fined a big time, like 10 times over what you're not injecting so people get fired quite quickly.
This customer had a big problem with one of the units they had bought and we said, look, if you use our product, we will give you discount and all that. If you use our product, we can guarantee that you actually not only meet you overt shoot it. And that's what happened. They overshot their production targets about 35%.
So this guy was like over the moon. He sent me all sorts of things to my office, and called me and said, Hey, did you get my gift? I said, Yeah. I was like, Well, what is all that about? He said, Oh, you really, really saved my life.
Karthik Reddy: There is hopium, and then there's this customer love. I'm a huge believer that customer love keeps you going when you're actually building for someone, that kind of feedback keeps you going.
This has been fantastic, Aniruddha, I mean, I didn't know what to expect when we got this going. I'm sure you didn't know what to expect as well. I hope you had as much fun as I did in recording this and having this journey and a lot of this wisdom, sort of, be recounted, not just for people even at Blume who don't know a lot of this backstory and this journey, but yeah, who we are recording this for, which is our audience and which is the Indian ecosystem at large. And in your case, you're a global player and I hope lot of people around the world listen to this fantastic story and this becomes a bookmark in what's yet to come. And again, good luck for the sake of all of us and our children and our next generate, that you're widely successful, that we need, as you said, 10 different types of Carbon Clean companies to make it big in this decade. Thank you again!
Aniruddha Sharma: Thank you, Karthik. Thank you, definitely, we're trying to do our best and really appreciate you taking this initiative to bring the stories out. I think it's the stories that actually motivate people, and as you rightly said, we need more and more of these stories. It doesn't matter whether they're like massive success, little success, failures even, I think people need to hear about them, and they need to learn from that as they embark upon the journey. So, I always say, even if our story could motivate even one or two people, that's enough! That's big enough for us.
Karthik Reddy: Ladies in gentlemen, it's a wrap. Once again, Aniruddha Sharma, Founder and CEO, Carbon Clean, proud to be an investor in this phenomenal journey. Thank you!
Part of X-Unicorns
What is a unicorn? A mythical creature, known to be proud, untameable, fiercely independent and difficult to capture. When venture capitalist Aileen Lee first coined the term, the definition was strictly limited to privately-held companies valued at over $1 billion within a decade of its existence. This definition was applicable to only a select few Indian companies such as InMobi and Flipkart. That’s all there was in 2013 that fit this definition.
After more than a decade at Blume, it is now becoming clear that India is birthing new variants of this mythical creature and we’re calling them ‘X Unicorns’. But when we look at a Carbon Clean or a Dunzo, they don’t look like typical unicorns. Some look like zebras and hippos, others rhinos, gazelles, and seahorses. They look like they could be any shape or size as long as they have spouted a large single horn or even two for effect.
It doesn’t matter what the path to the unicorn is, it doesn’t matter when they go public, it doesn’t matter whether they have a body of a horse or any other creature in the animal kingdom — as long as it reaches there and we want to look back and celebrate the ones that have entered and are soon entering the X‑Unicorn club. The age of the X‑Unicorns is upon us. Silently, they grow unnoticed and emerge valiantly into the limelight.
Karthik ReddyKarthik Reddy founded Blume with Sanjay Nath in 2011. Karthik has shaped Blume’s investment approach and philosophy over the years, and in turn has overseen investments in some of Blume’s leading portfolio companies such as…
- Current Section
- Co-founder & Partner
- Media, Entertainment & Gaming, ConsumerTech
Fantastic Fumes and Where to Find them: Carbon Clean's attempt at a Net Zero Emissions FutureIn 2021, Google Flights launched a feature where you could see the amount of carbon emissions against the flight options. For example, an Air India flight from New Delhi to New York will result in 903kgs of carbon emissions. To offset…
- Current Section
- Disha Sharma
Carbon CleanActive investmentCarbon Clean Solutions is a leader in carbon capture technology. Their cost-effective, scalable carbon capture solution helps power plants and industrial utilities such as refineries, cement and steel mills capture over 90% of the CO2…
- Current Section