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23-10-16 (English) - Coding Climate Action: Can AI save the Earth? | ft. Himanshu Gupta
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Coding Climate Action: Can AI save the Earth?

Guest: Himanshu Gupta, Co-founder of Climate AI

Hosts: Shreya Jai and Sandeep Pai

Producer: Tejas Dayananda Sagar

[Podcast intro]

Welcome to Season 3 of The India Energy Hour podcast! The India Energy Hour podcast explores the most pressing hurdles and promising opportunities of India's energy transition through an in-depth discussion on policies, financial markets, social movements and science. The podcast is hosted by energy transition researcher and author Dr. Sandeep Pai and senior energy and climate journalist Shreya Jai. The show is produced by multimedia journalist Tejas Dayananda Sagar and is presented by 101Reporters, a pan-India network of grassroots reporters that produces original stories from Rural India.


[Guest intro]

Climate tech is one of the emerging areas in the technology landscape offering a variety of new-age solutions for adapting to changing climate. Largely unexplored, climate tech has the potential to empower even the grassroot sectors with the ability to forecast and adapt to extreme weather and unprecedented climatic events.

In this unique episode, we talked with Himanshu Gupta, the co-founder of Climate AI, who explained the various facets of climate tech, the emerging Ai tools, and how he is deploying it in the sectors he operates. From agri to commodity supply chain, Gupta talked about the various tech solutions that Ai can offer for safeguarding against climate risks.


[Podcast interview]

Shreya: Welcome to The India Energy Hour himanshu. Very delighted. Very excited to have you here. before this, we were discussing how long we have known each other. It's been 13 years, I think, at least. I was in my first job then, and we just happened to cross paths in the lanes of planning commission, which is now known as Niti Aayog. So the organization we met does not exist anymore, but still, and since then, you have crossed the boundaries of Indian bureaucracy, gone to academics, became an entrepreneur. So very happy to see your journey and the work that you're doing in the Climate Tech space, something that remains so much unexplored. So great to have you here, and thank you so much for being with us.

Himanshu Gupta: And, of course, Shreya, thanks for inviting me, to the podcast.

I've heard great things about the podcast. And also to your point, we started our, careers almost together in Climate Tech, 13-14 years ago. And I used to call it like we, were all both like, kids, back then, from a career standpoint. And good, to be, connected and to see each other's career evolve, but also, how the climate tech of the sector has also evolved in the last ten to 15 years.

Shreya: Definitely. I think the best way to explain this, growth in this sector is through your own journey. you have had a very interesting journey from some of the premier institutes in India and also in these states. Why don't you tell us a bit about yourself. I think our listeners would love to listen about how a boy from Vrindavan went on to start a climate tech startup in the United States.

Himanshu Gupta: Yes. And the reason I say boy from Vrindavan is, as your listeners would know, grew up in a very conservative household, and in a very conservative town, where, even now, I'm still sure, like, selling eggs is banned. Right? You can't sell eggs, in the town, for obvious reasons. But, the reason I wanted to mention Vrindavan is it's primarily a religious, tourism based economy. And I did not know what, California was till I was 20 years of age, right? And the first flight that I took in my life was at the age of 20, when I was coming to the United States for my internship. and this was like a three leg flight, and was very nervous. look, I was more nervous taking that flight than I was nervous, starting my career in climate tech.

So that's why that background makes a lot of sense. It also defines what I am because growing, in a lower middle class household, back in India. And, my father, did not go beyond high school. But, as I say, like both my father and grandfather, they instilled values, in their children, which I think is more important than any other degree that you might get, either from India or from abroad. Those values of around, like, discipline, values of passion for what you do, and values for mentorship, right? Where you know that they knew that they won't be able to help their kids, from a mentorship standpoint, in education, but they always instill that you find mentors in your life who can help you grow, well, in your careers. And that's why I think, in my view, values, those values that were instilled in me, and of course, my siblings as well, are responsible, are primarily responsible for whatever, success I had and contributions I have made, to the climate tech sector. And so, talking about mentorship over the last ten, to 15 years, I've had opportunity to make incredible mentors, starting with my, first job, out of, IIT Karakpur. and I called myself, a recession baby. like a millions of, students who are graduating back in 2008, and nine call themselves and my first job after that was in a French nuclear energy company called Ariba, where I was responsible for making smartgit products, all the way from soldering wires, chips, coding, and to eventually selling those products, as well, in the Indian market. And smart kits as a concept was very new back then. so from there, I can go deeper, in the later of the conversation. But then from there, I moved to planning commission, started, working, with Anil Jain, who also appeared on your podcast, I think a few episodes ago. And in the process, I got in touch with, Montexingalualia. We worked together, along with Anil Jan on Indian Security Scenarios 2047 project. and going back to the concept of mentors, in the process, I built great mentors in the form of Anil Jain, Montex and Galualia. And then, moving to London where I briefly worked with, Nicolas Stern, from while India was focused on energy and climate policies, which are India, and Asia specific. But then I moved to London where I started focusing a lot more globally, on some of the projects that I was working with lord Nicholas turn on again, going back to like while he was my boss. He eventually became my mentor, as well. And then, now, starting, climate AI was six years ago, where Lord Nicholas Stern was very instrumental in pushing me, into starting, something of my own when I was at Stanford. so if I look at my journey well, I can go into specific parts of my journey, but two or three takeaway, which I have is, was like, I talked about mentorship. So I always make it a point to when I'm moving into new sector, when I'm moving into starting something of my new or my own, or new initiatives, I look down as mentors who can give me right advice, number one. And making mentors, takes patience, takes hard work, number one. Number two is the passion. I've never been attracted by the herd mentality, and so to say when I was graduating from IIT, the herd mentality was to start your careers in investment banking, in Goldman Sachs, Morgan Stanley, just like a lot of IITs do. But I never wanted to do that. I was always passionate about, energy and electrical engineering as a child, and I'm lucky to have still, been able to pursue that passion, even till now. and that's the second part. And third part is, which sort of defines my journey, is that I always tend to make my goals in a ten year, interval. Right. so when I started working in Planning Commission, I did not know anything about policy, I did not know anything about economics, finance, but I had to contribute and eventually, help my bosses and my mentors, make decisions. but even then, I had in mind that learning, about a sector, contributing, and then eventually making a difference takes time. And that time is ten years for me, and that's how I measure my life. And fortunately for me, that has worked. so started, in engineering, read the highest forms of engineering, started in policy, read the highest form of policy by working with vice, President Al Gore, in his private office. and that's again, my job in, role in climate AI. When I launched this company, where we are creating a new category called Climate Adaptation Tech. It doesn't exist, but I also know that creating that category takes a lot of time, lot of patience, lot of hard work, and I've given m yself ten years to do so.

Sandeep: That's fantastic.

Himanshu Gupta made the transition from tech to policy at Planning Commission

Sandeep: I just have a quick follow up. How was your transition from, I guess you have not left tech, you're still doing tech, but how was your transition from tech to policy and then tech? Do you still do any policy work? I have also switched thousand times my fields. I, find the switching quite complex and challenging in the beginning, but then you kind of start to enjoy, I mean, climate itself is an interdisciplinary topic. So having the lens of both technology, policy, social side, it's good. So I'm just curious about the switch and the challenges and how you manage that.

Himanshu Gupta: Yeah. So to your point, Sandeep, yes, it's not easy, to make that switch. However, in my experience, what engineering and tech taught me is to think logically, about anything. To me, policy is yet another logical outcome, of the steps that any country takes. however, I'd be, misleading your listeners if I say it was easy. I remember when I, started my job at Planning Commission, a, lot of those terms were pretty new to me, right. even like, feed in tariffs, as something like that. Or, come to think of it, I was an engineer. I could talk about chips and C plus plus, and wireless communications. I could not talk about, GDP and its impact, like low carbon policy and yada, yada, yada. So I still remember those days. Planning Commission office would start at 830 or nine in the morning. I would be there at seven in the morning, from seven to 830. I would be just watching a lot of YouTube videos learning. I'd be watching, lectures from MIT from seven to 830 about, one subject, let's say solar and solar policy. What's happening in solar, and how do you understand solar policy? From first principles? Right. so that's how I would start. And I was a very curious person. I'm still a very curious person. in a lot of meetings, which I would have inside planning Commission, I would ask questions. I was not afraid to ask stupid questions. And that's also, like, an important thing. The moment you think about just asking smart questions, then you are inhibiting your learning quite a bit. so that was the second principle I had, which allowed me to learn very quickly about policy making. And third, of course, being immersed. they say, like, if you have to learn swimming, the best way is to someone who to push you into a swimming pool and to figure out how to swim. And that was my experience working, in policy, in Planning Commission, where I had to contribute policy memos. The good thing was, again, what I brought to the table to Planning Commission was my deep understanding of the technology world. like, how much time does it take to build a technology, how much time does it take to deploy the technology at scale? What are the challenges that come up? how does the industry respond to it? Like, I remember smartest was a very new term to a lot of people. and I remember the questions that used to be asked me, like, okay, so what is a smart grid? Are you saying that our grids are not smart? Right. so those are the questions that used to be posed to me, not, to make fun of those questions. I think they were genuine questions. that's what I brought to the table and to Planning Commission. and kudos to my mentors, who actually were very patient with the questions I would ask them about policy terms and so on and so forth. And they will take out time to explain to me. So, we both fed off each other, where I learned a lot about policy, and my bosses, learned a lot about technology from, me. So it was a great match.

Let's try to understand what is climate tech. Start from first principles

Sandeep: in that spirit, let's try to understand what is climate tech. Let's get into the weeds of the topic a bit. So start from first principles. I like the word first principles that you use. Start from first principle. What is climate tech? I'm sure it has gone through its own journey and evolution of what it used to be many years ago, when probably it's the same in every field. The fields evolve, the, terms evolve. So if you can also narrate how it has, kind of moved that journey, and what are the latest climate tech, technologies that one can think of in the current scheme of things.

Himanshu Gupta: Yeah, as you said, Sandeep, it's a very complicated term, and there are so many definitions of that term that have come up in the last four to five years as sectors evolving. and this is my definition. The way I think about climate tech is, technologies like climate tech, so climate and tech. So technologies that can help, us mitigate, the greenhouse gas emissions that are causing climate change. that's one part. And then there are technologies that can help us adapt to the impacts of climate change. That's the other part. But that's one definition, of climate tech. there are multiple other definitions of climate tech depending upon whose lens you're looking at from. So, if you're looking at from a VC lens, their mitigation tech and adaptation tech is not as popular. they're looking at it from like a technology lens. Right. So is it a SaaS technology? Is it a platform technology? Is it an ecommerce platform or what? Right. That's a VC lens. then another lens to that is within carbon. Are you monitoring carbon in the atmosphere? Are you reducing carbon in the atmosphere? Or are you basically, substituting, carbon, in the atmosphere, through the technologies that industry uses? That's another definition. and then there's another definition, which I've heard, like, again, thinking about technology and policy. Is this hard tech versus soft tech, software. Right. So are you working on, hardware technologies that can help you, either reduce carbon or, adapt to the impacts of climate change? Are you working on software technologies that can help us do the same thing? Right. So there are multiple definitions. To me, as an entrepreneur, the first principle for me is always the problem. What is the problem you are solving? and in this case, the problem that we are solving for climate AI is how do we help the world adapt to the impacts of climate change? So, that is also the definition I like personally, which is mitigation and adaptation. it keeps us close to the problem at hand, rather than the other way around, where you are thinking about the technology first, and then finding problems where technology could be applied.

Shreya: Right. Great. thanks for the definition.

Why choose climate tech as your jumping point for entrepreneurial venture

Shreya: I wanted to prod you a little bit and understand why climate tech, taking an entrepreneurial jump is one thing, but choosing this particular segment is another. It's challenging in the fact that it has not been explored much, at least to the extent that one would imagine that it is a scalable or not. Like there are not enough examples on that front. so why choose that? Because then it makes your jump double challenging.

Himanshu Gupta: Yes. absolutely ishra that's a great question. and what makes it even triple challenging is the fact that I went from the government sector, after having spent four or five years there, to starting something in Silicon Valley, right. away. And I can talk about that challenge later on. but to your point, why climate tech? Right. I think it goes back to, my roots in planning commission. there were a couple of trends that I saw there. One, was, if you remember, we were working on this India Energy Security Scenarios Project for 2047, which, is how does India become energy independent within 100 years of India's independence? Right. And working on that project. So I was the lead modeler there, gave me a lot of high level understanding of each and every sector in India, all the way from agriculture to, energy, to, buildings, telecom, and so on and so forth, both demand side and supply side of climate change. What are the key challenges coming up, and what would it take for India to move to complete, energy independence, by 2047? And as part of that, of course, one of the pathways that we came up was, the low carbon pathway for India. and we used to call emissions as a byproduct of, an energy independent pathway, right. For multiple reasons that I can go into later on. So that was one. So I got a chance to look at these sectors and the problems at a very high level, and not just like high level, but also, from a quantifiable high level. Right. so if India to grow at 7% or 7.4% every year, how will these sectors grow? What do we need to do in order to, ensure, a very smooth energy transition? And the second part, was because of my background as a technologist, I was always very good at, going deep into a specific problem, and that's what the training as an engineer, makes you. I remember those smart grid products great. It's great to understand the potential of smart grids onto the India's energy sector, but it's also great to dig deeper, double down, zoom in onto specific technologies that can create an impact. And what would it take for us to develop, deploy at scale those technologies? so having those two perspectives, which is zoomed in perspective on a specific technology, and zoomed out perspective, from a policy lens, allowed me to understand the problems that are going to come up in every sector. And one lowest common denominator was, climate. And if you remember, like, I don't know if some of your listeners who have played with India and its security scenarios project, there's a mystery, switch there, which I don't think I don't know where many people know about. and this was back in 2013 and 14, what I did was I created another scenario of what if, India's average temperature in India as compared to 1850s increased by two degrees, four degrees, or six degrees, right? And I just created that tool as, a small switch. Not that it was initially part of the agreed upon project, I just did that. and the results actually shocked me as well. As to if India's temperature increases by two degrees, what will be the impact on the energy demand for buildings? As we all know, like, the air conditioning demand goes up, what, will be the impact on agriculture and the energy consumption there? And that, to me, was a big number. So I knew always that there's a big problem coming up. And some of you will also remember, back then, we used to have discussion planning commission around farmer suicides happening in the west of India, especially with cotton farmers. so for those of you who don't know, for some of your listeners who don't know, like, every alternate year, if there were a drought in the west of India and cotton crops being very water guzzling crops and most of the cotton farming in India is still rain fed, is based on rain fed irrigation. Many of those farmers will start committing suicides. and this was a big topic of discussion back in 2012 and 2013. I don't know now, but used to be a big so there was a humanitarian cost of climate change that we were seeing. And then there was, of course, the economic cost of climate change from the tool that I built. So I knew it's a big problem coming up. The question is, do we have the technology to solve this problem? And that's where, at Stanford University, I found my co founder. we came up with a, technology breakthrough that gave us the confidence that some of these problems could be solved, especially on the adaptation side of climate change. And climate AI got launched. But to your point, shreya. Yes, the transition was not easy. Transition was far from smooth. I think it was even more challenging, than my transition from technology to policy, back from policy to entrepreneurship. This was one of the most challenging transitions of my life.

Sandeep: Fantastic. thank you for explaining all that.

What is the scale of climate tech investments happening or entrepreneurship

Sandeep: now let's talk a little bit more big picture. I just want to understand the scale. Throw some numbers, if you have it ready. What is the scale of climate tech we're talking about? If you can provide both the global context, but India and us, like some key geographies, what is the scale of climate tech investments happening or entrepreneurship? And what is the scale required to meet 1.5 or two? Or Paris Agreement, for example, is there any quantification of any of that?

Himanshu Gupta: Yeah, so, again, there are two ways of quantifying it. one is, of course, the policymakers way, and the second is the entrepreneurs way, right?

Let's start with the policymakers way of quantifying the opportunity in climate tech

Himanshu Gupta: Let's start with the policymakers way of quantifying, the opportunity, in climate tech. So, currently, our, emissions, we are pumping 36 gigatons to 37 gigatons of, emissions into the atmosphere. and everyone knows that for each and every country, like globally, we have to achieve net zero either by 20, 60, 72,100. That could debate it, but this has to be done annually. So let's say in the next five years, these emissions keep on increasing to 42 gigatons. We need to reduce, and sequester 42 gigatons of carbon from the atmosphere. Now, at a very conservative price of $40 per turn. basically, you can do the math. We, are looking at close to $1.6 trillion, if I'm not wrong. So 42 gigatons multiplied by $40 per turn, that's close to $1.6 trillion of annually of investment that needs to happen, of value that needs to be created. A very back of the envelope way of understanding the amount required. And the second is around this is on the mitigation side, on the adaptation side to your points, even at 1.1 degrees and 1.5 degrees, even if you are able to limit global warming to 1.5 degrees, we are already seeing the impacts of climate change. We are seeing, right, with, the summers breaking records in Europe, in the US. and in India as well, with heat waves in March. so we need technologies and investments to adapt to those impacts, too. and that, again, is a $1.2 trillion, opportunity. And again, it's a back of the envelope calculation. And from a policymaker's view, because every year, there's $1.2 trillion of losses happening in supply chains because of extreme weather, right? So if you basically want to reduce those losses but also create more value, this is the minimum. You basically, an opportunity that exists now. The opportunity could be even higher in adaptation. So you can think about the scale, of, opportunity that exists in the sector. And I think there'll be at least, 100 unicorns that would be created over the next 30 years to basically deliver on this opportunity, that exists now. From an entrepreneur standpoint, we like to look at things from a very bottom, up view, and so if we solve a specific problem, what is the value of that specific problem to be solved for a specific customer or a client, and how much of that value in an entrepreneur is able to capture? Right? so, for example, with Climate AI, we have seen that, let's say we are helping, food companies both monitor as well as reduce the impacts of climate change on their food supply chains.? And we have seen that, based on the existing contracts that we have with food companies globally, and we multiply them with, the number of food companies and agriculture companies we can work with. And then you further scale that to the number of, energy companies, manufacturing companies that are going to have similar problems, or already having similar problems. We look at this as a $93 billion opportunity, market opportunity for climate AIO, in helping companies adapt to climate change. That's a very entrepreneurial view of life, which is bottom up based on number of contracts, number of customers, but then there is a top down view, too.

Shreya: I also wanted to know from a company perspective, what is the scale of your operations? If I were to understand, how many people on the back end do you have? How many people do you have on the field? how does a typical company, functioning in climate AI, operates? Okay, sandeep also has an addition to.

Sandeep: Just a supplementary question. Let's go back to the first principles. What is climate AI? Like? What do you guys do? And then let's get into Shreya's question, just briefly so that people have context.

Himanshu Gupta: so I'll start with the jargons first, and then I'll explain the jargon. so we are an AI based, climate adaptation platform for currently working with food and agriculture supply chains. so what that means is, first we use AI to predict risk of heat waves, wildfires, droughts, hurricanes at any global location from two weeks out to 20 years out. That's one. The second part is we translate those risk into specific insights, for food and agriculture companies. Right? So as an example, how would a heat wave impact yields of almonds or potatoes, or nutrition and quality of, almonds or potatoes at global locations? And the third part is we call it the adaptation playbook. What can companies do to reduce those risk? as well, this could be anywhere from like, moving, to new locations, which are coming up for growing specific crops due to climate change. This could also be working with existing farmers on making them more resilient to climate change, or launching new seed varieties in some markets, and so on and so forth. And that's the adaptation playbook, as we call it. And in this process, as companies deploy these adaptation playbook, that leads to both, them becoming more resilient, their farmers becoming more resilient, but also creates a big market opportunity for them. So we call it like the business case for climate adaptation, where if every $1 you invest in climate adaptation leads to basically anywhere from ten dollars to fifteen dollars return on investment near, to midterm for the companies that we work with. So right now we work with close to, 45 global brands in food and agriculture. and of course there are some in manufacturing too. So all the way from, ITC and other tabula group and UPL in. India, to Santori in Japan, which is their largest beer and beverage brand. to many European companies like Basfs and Genders of the World, to a lot of American companies where we started. So if you were to open your refrigerator in the US. you're based in North Carolina? Indeed. So most of the brands that you see, either we are working with them or in their pipeline, like Ocean Spray, Dole, Driscolls and so on and so forth. But the platform is global, right? Of course, most of these companies have global supply chains. so we work with them on their global footprints. it's just been five and a half years. There are 74 of us in the company with three offices. Mexico, San Francisco, and a small office in New York.

Sandeep: Sorry.

Shreya: you work in a sector which is very much driven by how you connect with the communities that are involved there, or is your association with the corporates and they are the ones who take this forward. is there a business case or is there a business section in your company in which you communicate directly with, say, the farming community or the commodity communities because they are hard to move, sectors. so what is your engagement like?

Himanshu Gupta: Yeah, great question. So when we started Climate AI, we were always, we call ourselves a mission driven company, right? And not just like it's acute, one slider on an investor's debt, it's a mission driven company. M. We consciously made a choice, that we are never going to work with upstream oil and gas companies, and help them become more resilient. And we are stuck by that, principle even now. It's been five and a half years since we have done this company. That's, one, two, is our mission was, to basically climate proof global supply chains while improving lives and livelihoods. And in almost all of the use cases that we can discuss, you'll see, there's a direct and indirect impact on lives and livelihoods of people in the supply chain, for these companies. so there's never been like any conflict like, okay, are we only going to work with corporations? And what will happen to the farmers now in food and agriculture supply chains? Of course, the most vulnerable communities in those supply chains are farmers, for that matter. And we as a business, we made a choice that if our end outcome is to scale our impact, the best way to do so is work with the ecosystem around farmers. and not with farmers, number one, because typically, as you said, shreya farmers, they basically know a lot more about their crops than we do, to be honest. they've been burned. With so many startups in Silicon Valley coming and promising moon to them, and then disappearing all the time. so there's basically a lot of skepticism that exists among farmers for the right reasons. and I'm not even talking about smaller farmers in India or Latin America, which basically don't even have any capacity to pay as well, right? and they are so much busy in their day to day lives forget like they don't even have time, to basically adopt a new technology for that matter. So we said if you work with ecosystem around farmers, which is food companies, seed companies, fertilizer companies, processors and packers, not only we can create impact with the food companies, we can scale our technologies with the farmers as well. So let's say a typical food company will be working with close to ten, thousand to 100,000 farmers globally. and because their agronomists have trust with the farmers, what happens is, in the first two years, these food, companies are testing our technologies, internally. and if they see value in it, then they say like, okay, now we can deploy these technologies with the farmers, as well, because it's vetted and coming from them. So it helps us get scale and break that barrier of trust, with the farmers too. now we are basically as I said, we work with 40 to 45 food companies. Out of those, at least five of them have deployed our platform with the farmers they work with, too. And that creates a win win scenario for them, for both of them, where if farmers use those technologies, they become more resilient. At the same time, food companies get more reliability in their supply chains, if farmers become resilient.

The most important contribution that camet AI is making is predicting the changing climate

Himanshu Gupta: so that's another example of that would be it's a big problem in the US. which is we call it like rebuilding your houses, after hurricanes, right? And typically what happens is after, a hurricane has struck, people's roofs are blown off. And like, the way it happened in Florida last year, due to Hurricane Ian, suddenly the demand for building material spikes up, right? So you would have seen videos, YouTube videos of queues of people lining up outside the retailers, and going back empty handed because there's no material left. The material could be roofing shingles, could be cement, could be mats, right? so we had this company that come to us and said like, hey, can, we use your platform to help optimize our sales, inventory across those multiple regions in the US. based on the hurricane risk. So if, let's say there's a high risk of hurricane impact in Florida, so can we have more inventory in Florida? Two, three months out? and if that happens, then not only that, that building materials company gets more revenues, because of it, but also they help their customers, which are typically house owners rebuild faster, as well. they have enough material at the right place. So that is also like during Hurricane Ian, we help this company generate $15 million in revenue, additional revenue in one season alone. At the same time, they didn't have any queues outside of the retailers, because there was enough material available for everyone. Right. So this is the pattern of the use case that we have across all the companies that we work with, that there is a direct and a very tangible, direct or indirect impact on the communities.

Sandeep: Right. So, I mean, himanshu this is, again, maybe a very basic question. the most important contribution that camet AI is making here is predicting the changing climate, right. Between two weeks and, like 20 years, you said, I think. and because of that, predictive power companies, organizations, the ecosystem is able to gather their resources to use it efficiently. Is that a correct understanding of climate AI?

Himanshu Gupta: So, predicting the changing climate, but also predicting its impact on specific, crops, commodities, or assets as well, because, as an example, almonds and pistachios are two close cousins of each other, while almonds are, as a crop, are very sensitive to drought risk. pistachios are not. However, pistachios are very sensitive to heat risk in the winters, while almonds are not.

Sandeep: Right?

Himanshu Gupta: So, it's so important to understand which companies want to understand, like, hey, this is great. You can predict there's a heat wave coming, but what do we do about that? Why should we care? And that is the answer, which is, I think, more important than actually predicting, like, why should you care? one example I would, like to give there is, like, during COVID right? when the pandemic was declared, what is the most urgent thing the world was waiting for? Vaccines. and I tend to draw a similar analogy in climate change as well, right? Climate change is impacting food systems and water systems globally. and we have seen skidding geopolitical tensions as well. Like last year, India to ban, wheat, from as an Indian, I think for the right reasons, but as a global citizen, I think there were things would have been done better. Right. So if if climate change is impacting food systems and water systems, the vaccines, in this case, would be your climate resilience seeds for farmers. Right? Typically, in fact, this has been our most, inspiring use case that inspires all of us, even to me, even now, which is, how do we help seed companies launch climate resilient seeds faster to the market, and to the farmers? And one example of that is, and before I go into the example, and that, to me, presents a really big opportunity for individual countries, including India, to become, let's say, a food manufacturing hub or seed manufacturing hub. one peculiar example of that is, as we all know, all of you are aware of the Tomatino Festival in Spain, right? Spain grows a lot of tomatoes, period. but because of water issues, it's becoming more and more difficult to grow tomatoes in Spain. And, then, of course, Spain is getting hot, too, right? So, a lot of seed companies, and to me, it was baffling many seed companies producing tomato seeds for farmers in India. They would produce those seeds in Spain and export them all the way to India, right? And now they are seeing, those impacts, because one year, they are falling short, of their seed production. One year, they are like, 200%, their seed production. So they want to work with us on where else can they grow tomato seeds, and how can they launch those seeds faster? Because a lot of farmers in India are suffering, right? I mean, they can't produce heat tolerant, tomato varieties for farmers in India. Then, of course, there are both economic as well as humanitarian challenges, which we discussed in the podcast earlier. so a typical process of launching a seed takes ten to 15 years in the market. Very similar to launching a vaccine or drug trial, or a drug. And in this ten to 15 years, two to three years is basically about, conducting, like figuring out locations and conducting trials, and coming to a conclusion that these are the locations where we should actually be start, setting up our research centers and think about, producing these seeds. So, the way it happens today is these seed companies are sending teams of four to five people globally. and those people are setting up camps, quite literally, m collecting a lot of soil data, water data, weather data, reporting it back to the headquarters. And then they decide that, after two or three years, that this is a location where actually could be a new growing location for tomato seed. a, already two or three years have passed. B, each of those camps, or like those teams consume half a million dollars, to do so. And C, even then, this analysis is based on historical data, because by the time they launched tomato, seeds into the market, climate would have changed already, or new pest pressure would have come up. So now, with our platform, they can just draw a circle, let's say, on Spain, on a map for Spain, and this is where they are growing, let's say, and saying that, hey, this is where we are growing tomato seeds in Spain. The platform will automatically, basically figure out in the history what led to high production of tomato seeds in Spain, what climate conditions, water conditions, and soil conditions. We'll roll the clock forward ten to 1220 years, and then pattern match using machine learning, what all areas are coming up, for doing so, for growing that particular seed.

Sandeep: Right?

Himanshu Gupta: Now, in this case, we told this company, like, why are you producing in Spain for India when you can produce in India for India? And they are actually acting on that. So they are going to make, 5200 million dollars of investments, in seed markets in India, if you were to zoom out. so this is all happening because of science, right? and more and more so after the war, where food supply chains and seed supply chain have been disrupted, I think it's a big opportunity for India to sort of say, like, okay, look at all the food supply chains for what? All foods or crops. India can become a seed manufacturing, hub. And it'll be a better to us, it'll be a better livelihood opportunity for farmers and growing crops. And the reason being because seeds are high value item versus crops. so farmers can get paid a lot more for growing the same amount of crops for seed production than for crop, like, we call it, for, countries like India, a really big market opportunity coming up due to adaptation. But also, this Use case inspires us, allows us to hire the best AI scientists globally, because we're actually creating change, for farmers as well as the food system. The same platform that I talked about was in Time magazine's best Inventions list for last year, along with OpenAI. And this platform has been deployed across 60 countries, 30 plus crops, and has created an impact for close to, 2.3 million farmers.

Sandeep: So, hey, Manchu, correct me if I'm wrong, but it's like a different kind of I mean, you use the same technology, but you create different platforms based on, the Use case or the user's need.

Sandeep: Do you have geologists on the ground for AI predictions

Sandeep: but one question I do have, and this probably speaks to the power of AI and remote sensing and all the machine learning stuff, but do you have geologists on the ground? And I mean, this is probably a basic question, I'm just getting into the methodology. I mean, do you only use the satellites and stuff, or you send your geologists and both kind of complement? Or is it all the text up, maybe this is a basic question.

Himanshu Gupta: I think you're onto something here, Sandeep. geologists, in case of agriculture, are known by the name of agronomist, right? While geologists are very good at, just conducting a lot of research on rocks and figuring out their chemistry, agronomists are very good at figuring out the chemistry of soil and its interaction.

Sandeep: I meant agronomists. I mean, geologists. I was in mining mode, but I meant the same.

Himanshu Gupta: I understand. Yeah. so we have, three PHA agronomists on staff. Now, to your point, we don't send them, to multiple geographies, and on the ground. And the reason being, a, because for our work, we don't need to give like a centimeter or meter by meter predictions, right. we are giving predictions for a specific region. This region could be, let's say, a 25 kilometer or 25 kilometer at that resolution. lot of those soil maps are available globally, right. which we can tap into. Like, there are databases from Food and Agriculture Organization that are available that we can tap into. So we have, over the last six years, we have collected a lot of that data. Number, one, number two is, we work with a lot of food companies who have their agronomists on the ground, right. And there are agronomists which are focused on, I don't know, Maharashtra. And there are economists which are focused on Gujarat, right. And they have assembled know how and expertise for the last 2030 years. and it's a very valuable expertise and know how, which AI can learn from. Basically what happens is, if our AI is generating some insights and prediction, we can test it with those economists, with those food companies, like, hey, is this aligned with what you have seen over the last 1020 years in your region? And more often than not, the answer is yes. and this is where our value comes, where these economists say like, okay, it took us all these years to figure this out, where this AI can do that in like minutes. So it's not replacing them, it's actually making their jobs a lot easier. Where an agronomist, let's say, even focused on Maharashtra, can focus from a 20 kilometer, 20 kilometer resolution standpoint, can focus on the problematic areas of Maharashtra, rather than acting, blindly.

Shreya: Interesting. A very interesting model.

How challenging or easy was it to raise funds for Climate AI

Shreya: the whole business as a whole, how much interesting has this business been for investors? according to your website, you have a stellar list of investors, including, Robert Downey Jr. Himself, which is one of the celebrity investors in your company. But apart from that, how has your experience been in the investment community? How do they perceive, first of all, climate tech? How challenging or easy, difficult was it for you to raise funds for a company such as yourself? give us an overview on that front.

Himanshu Gupta: Yeah, this is also the most sensitive nerve that I have. and you touched upon that shreya. So, when we were launching Climate AI, out of Stanford University, and we started pitching Climate AI to some of the Silicon Valley investors. And this, I'm talking about the end of 2017 and early 2018, the response that we would get was, are we running our nonprofit? Right. and no one actually thought that people would be willing to pay for it. In the VC world, climate tech was a very new term, right. To an extent that, if you remember, in 2019, I wrote my own blog on climate tech. I think it was the first ever blog on how do you define climate tech and how can you separate that from an adaptation tech, mitigation tech and just to educate VCs. So we have done a lot of education among VCs, globally, more so in Silicon Valley about why climate tech is a big opportunity for you. So, in early 2018, basically, we had a hard time fundraising, to an extent that I remember the first person that we hired, first Engineer, both me and my co founder, Max. one night after the dinner, we were talking to each other like, great, we have this one engineer who has accepted our job offer and we are going to pay him $7,000 per month. Great. But then we have no funding. and we said, how much do you have in your savings account? How much do I have in my savings account? We said both of us had jointly $15,000 in the savings account. Our own savings account. Right. And doing an MBA is a very expensive proposition anyway, so we basically like, both of us, kudos to my co founder as well, were pretty risk taking. we had just $15,000 in our savings account. We agreed to pay $7,000 to an engineer per month, based on that. But then what happened is a lot of our professors from Stanford trusted us. They trusted us, believed in us not because of the technology or not because of, the sector. They believed in us because of us, as students, like students who they had seen perform really well in the class, and they knew that whatever we would do, would become great entrepreneurs. It doesn't matter what sector and what company we do. So that's how we got our first angel financing, from a professor at Stanford. Otherwise, it was very difficult trying to raise financing, in Silicon Valley. and then after that, see how much the sector has evolved. Last, December, like we all know, it's not a good time to fundraise, for entrepreneurs globally, and not just in climate tech, like in any sector, except for if you are in gen AI. it wasn't a good time. So I was preparing, to leave for my holidays. my wife and I had planned to go to Italy, was last December. I received a call, two weeks before that from an investor, who actually knew all two of our board members that, hey, we have conducted diligence on you guys. we have talked to some of your customers already, and we have been tracking you. We want to preempt your series, B. so some of those for your listeners who don't know preempt. What does preemption mean? Preemption means when a VC fund comes along and says that we don't want you to go out to the market and raise, because we really like the sector, we really like the technology, we really like the company. and here's a term sheet for that. So it's a win win for both the parties because fundraising takes a lot of time out of an entrepreneur's life. A time which could be basically well spent on building the business. And so before leaving, on 24 December, for our holidays, I was signing a term sheet. Like, you see how the sector has evolved in this four or four and a half years from actually, getting the feedback that, hey, are you running a nonprofit? to an investor coming along and saying that we don't want you to raise in the market, and here's our term sheet and sign it. so it's been great to see, how a sector has evolved. Now, I also do some angel investing myself. I've invested in a few, climate m tech companies as.

Shreya: Great, you know, globally, and even in India as well. The VC universe has been open to such ideas and that's great. are you looking at the private equity investors as well? Would you like to get some investors on board or your model as a company? you do not want to I'm asking this because I want to understand what are variety of investors interested in a company such as Climate AI?

Himanshu Gupta: So one is, as an entrepreneur, it's very important to have a clear conviction and a clear long term conviction on your business in climate tech. while I can't emphasize the importance of this statement, we are not like any climate entrepreneur. Whether you're doing, in Carbon or you're running like a battery company, you need to have a ten year view and you need to ensure that your investors align with that tenure view. Because you're not creating a Monday, you're not creating a slack, you're not creating Twitter in here, right? Which is going to see that exponential exploding growth in user base, within months. which sort of is a good segue into your question, Sharia. Like, the various categories of investors, typically private equity investors, are useful when, the business has hit ten to $20 million revenue mark. You have a very predictable sales motion. You're close to 100 to 200 customers, and now you feel like the value could be created by introducing more efficiency and processes in the business, because startups are very much chaos, right? so if an entrepreneur thinks that a lot of value could be created by introducing a lot of discipline processes, and running your companies, like sort of big companies, one, and then two is once you have done that, then private equity capital can help you just scale that, right? then only private equity makes sense. otherwise, as an entrepreneur, you are in for, really hard time in terms of relationship with yourself and your investors. And the reason being because investors typically want to see returns on a 30% annual basis. Right. on a more consistent basis. but climate aggregate sector is still evolving. A lot of those playbooks, like, what has to be the right product, for a specific variety of company, is also evolving. Right. For example, even food sector, we have seen, like, food companies, even they are the most impacted by climate change. They're still coming to terms with the amount of money they want to spend on climate tech. Right. And that takes some time. Similarly, like food, companies will pay very differently from manufacturing companies. A manufacturing company will pay very differently from data center companies as well. So, if you don't have a long term view, which is ten to 15 years, imagine, like, Paytm in India is the best example of that, since, they've been in operations and correct me if I'm wrong, since 2006 and 2007, on digital payments, right. No one cared about it. the doth was very slow, until Demonetization. Right. a switch happens. A flip of switch happened, like, in a moment, and they saw on exploding growth. I think, as an entrepreneur, you need to have a similar view in climate tech that, yes, our job is to evangelize the market, keep on educating the customers, like companies, and have that long term growth view. And there will be one inflection point when the companies will be like, every company on this planet Earth would want our technology. And depending upon which specific technology you are developing in climate tech, that inflection point, either, is already there or might be five years away, or six years away. So it's very important to align your investors and your board, or whichever new investor you are trying to get on board with that philosophy. Otherwise, good, luck running your company with board with very different expectations, than what an entrepreneur would have.

In general, climate finance and climate work is very mitigation focused

Sandeep: I just want to zoom out a bit and kind of ask a meta level question. I mean, one thing is that in general, and correct me if I'm wrong, but climate finance and climate work is very mitigation focused, because a lot of people can see, whether it's deployment or solar can see some returns. Right. Was it a challenge to get into adaptation space, to create and show value for the customers? If there is money, then the others will come in. did you face any of those challenges, or it was very clear the product that you were selling, or like, the value proposition was clear. So it didn't matter whether you were in the adaptation space versus mitigation space?

Himanshu Gupta: Absolutely. I think that's a great question, Sandeep. and the reason I say it's a good question, because my work used to be in Mitigation space, in planning commission. even when I worked with Lord Nicholas Stern was all about creating low carbon pathways for cities, for countries, for various sectors. I remember the time when I pitched this idea to the CEO of, Elstom. I used to know him really well in Paris, and this was back in 2014, I said, like, hey, whatever I've done for India in multiple countries, I can do the same for your company as well. Figuring out where, sort of giving you a carbon picture of various processes and factories that you have in your company and how would you get to the reduced emissions. And his answer was like, I know you are going to Stanford for start your MBA. I would rather have you do that than start this company. Right. and I don't fault them, because it was a very new thing, right? No one actually said, why should I care? but then, of course, the flip of inflection point moment for Mitigation sector was the Paris, agreement, right? And suddenly it became onto these companies that, hey, if you for what consumer, reputation reasons or reputation reasons regulatory reasons, or for consumer reasons, which are millennials, right? They want to see us care about our carbon footprint. And that started a new wave, right. of them investing money, on climate technologies. And we see explosion of growth of these carbon mitigation platforms, as you talked about sandeep. However, the problem there is it's driven by regulatory concerns. It's driven by reputation concerns, right? So there is not like an immediate ROI that the companies are seeing there. So you can get to those 30 $40,000 contract very easily. but then billion dollar companies or Unicorns are not made on 30 $40,000 contract. There has to be someone willing to pay you half a billion dollars, a billion dollars for the same technology to scale it, right? And that has not happened, because historically, companies cannot pay more than that for a technology which is just helping them, meet, regulatory requirements or reputational requirements. That brings us to adaptation. we started food and agriculture. In our case, the problem was already there, right? In Mitigation, the problem was basically defined by Paris, right? Hey, companies need to define their net zero. So it was artificially created for the right reasons. We need to do that. In adaptation, the problem was already by happening in Mother Nature. I don't know whether you remember, but last year there was this Pacific Northwest Heat Dome event, where temperatures in Vancouver, where you did your PhD, crossed 52 degrees Celsius. and the entire town was like, basically, we call it like a cooktop fed like a cook stove right in the middle of a cook stove, So in three days alone, if you are a food company, water company, energy company, or even like a data center, you lost, nine, billion dollars just in three days if you have operations in the Pacific Northwest. So, in our case, the problem was always there. the challenge for us was to tell the companies that a. This problem could be solved, through a technology, b, this problem is urgent enough. That's my problem with the narratives in climate change these days, we think of scenarios by 20 50, 20 60, 20 70, and it gives us a false sense of cushion. Like, okay, I don't need to worry, like, if a typical CEO of, a public company is there for the four years or five years, right? so their performance is not measured for the next 2050 or 2060 time frames. so once we told them that with our work that your supply chains or operations are getting impacted right now and doesn't matter whether it's 1.5 degrees, two degrees, four degrees, these impacts, are more than what you have seen in history and are also only going to increase in the next five years, not next 30 and 20 years. And that to us, that education paid off when CEOs saw that. Okay, this is something you need to add right now on, and B, there is a market opportunity as well, which is if we act on this, it leads to a lot of return in ROI. But also we can be the market winners, in terms of the opportunities presented by climate adaptation. And that is the inflection point for us, which we think is coming this year. And next year, where you see, like, World Economic Forum is also going to make adaptation as a priority agenda for next year.

How much of acceptance would climate tech solutions have in developing countries

Shreya: As we are on this topic, I want to push a little further and, ask the current projects that you have seem, to focus a lot on developed countries, if I may say so. How much of acceptance for climate tech solutions climate tech models would be, say, in least developed countries or developing nations which would be in the first line of impact from climate change and are not that prosperous enough to look for instant solutions, urgent solutions, as you mentioned, and to prepare in advance. and it would lead a huge amount of investment into their infrastructure, into their planning not only just at corporate level, but at government and policy level as well. as a businessman, as someone who offers climate solutions, what do you think of this catch, 22 situation?

Himanshu Gupta: So, as I mentioned, our platform is global. and the companies that we work with also have global footprints and global supply chains, right? So, for example, we are working with a, company by the name of MGK. they're based in Tanzania. and that's where they are growing their, crops. But, then the parent company, Sumitomo, Chemicals, is a Japanese company with global footprints, basically. so, indirectly, we're already working, in developing countries. And these developed countries, for that matter. however, of course, the affordability is a big question right now. When we work with global companies, even if we deploy technologies and platform in developing countries, affordability is never a question. They can pay for it. but however, to your point, affordability becomes a challenge when you start working with the partners who cannot pay as much, for photo solutions, right? and so this has been always been on top of our mind. As an example, this year, we have started, discussions with African Development Bank on, how can we partner with them, on the Feed Africa campaigns that they are running, right? I mean, after the war, most of the food supply chains, have been disrupted. Like, I'm talking about Russia, Ukraine war. and many of the smallholder farmers in Africa, were dependent on the seed supply chain coming from Ukraine, and that has been disrupted. And then many of these African member states, were also dependent on imports of wheat, and canola, and some of those, vegetable oil crops from Russia and Ukraine. so there's suddenly a question of food security. there's certainly a question of livelihood security. Farmers cannot get access to seeds. What will they grow? so all these member states have come up with their feed, Africa, or like food security, initiatives. And we think our platform can help, quite a bit in helping them figure out what crops can you grow locally, and then what crops, and how can you monitor and optimize the yield of those crops as well, every year. but then we are hoping that the funding will come from African Development Bank, but the platform will be deployed with, the farmers with no cost for them. Similar stuff we, have in Latin America, too. And last, year, I think, when I met, Sita Raman in DC. washington. She was here. We talked about a similar model, like, how can we work with Ministry of Agriculture in India, where some, of that funding could come from, word banks and the likes, or from locals, mind you. India, basically, India, is between now developing countries and developed countries now. So India doesn't need, any help from any other country, or development agencies. It's like pulling together right resources and deploying it. And to an extent that some of the engineers that work with us, they left jobs with, quite literally half a million to a million dollar annual, paying jobs with Google and Facebook to work with us for impact reasons. and if need be, let's say, if, prime Minister's office in India or wherever were to tell us that, hey, for farmers, these are the right, FTOs, we call them, in India, in cotton. That, your technologies could be very helpful. We don't mind deploying, giving that technology for, like, free, as well, to those farmers, if need be. But again, our, one caveat is, there has to be someone, responsible for deploying, as well as monitoring the use of the technology, typically, otherwise, what happens if you think for free, then it's for free, right? And no one cares about whether it's being used and how it's being used and training the farmers and so on and so forth. But otherwise, we don't mind doing this. By the way, we are already working with three companies in India, like ITC and UPL, as well as, builder Group.

Shreya: That's great, thank you for covering all aspects of it. I think we covered almost everything that, we possibly could have thought of.

What is your plan after 2030 when Climate AI is like ten years old

Shreya: on your end, I wanted to ask from your, conversing with you, as I understand, is that you have a decade type planning, like, you plan for ten years. What is your plan after 2030 then, when Climate AI is like ten years old? what is your plan?

Himanshu Gupta: So, weird question. it's open right now, as I said, there would be at least 100 unicorns that would be created in climate tech, right? so maybe I might start something new in climate tech, post that. But this time the transition would be as painful as it was, when I started Climate AI. Right? There's so much of funding already available. I'll be a second time founder, and statistics say that second time founders are more likely to create unicorns than first time founders. that's one route. The second route could, also be, I have this deep desire to come back to India, this time in a policymaker role, and because I think that, climate is going to be, there has to be a separate ministry on climate. And not just because it's a big concern for India, but also, I think it's a big opportunity for India to go out and basically, be more aggressive, in the climate negotiations. right. and it's also a big economic opportunity for India as well. So, no one can predict what will happen in the next eight to ten years. But, if there are some right channels, I might want to come back to India as well in the policymaking role, especially after my exposure globally. and I think I could contribute a lot, to India. And third, which is, again, the only thing is, of course, I'm married. so it's not easy. I was living in my suitcases until 2017, when I got married. So if you tell like, hey, there's a new opportunity coming up in Spain, I just pack my bags and go to Spain. Now it's not possible, right? so we'll also have to see how that dynamics plays out. But my wife is also an entrepreneur. she's doing a lot of work in, fintech. so we'll see how that pans out. If not, we I might decide to move, in a global climate role, either with UN or somewhere else. But sort of options are still, very much open, and where we see. Let's see where life takes us. But as you said, I like to plan my life for 10 years time.

Shreya: Yeah, an amen to all of that. may what all of you plan comes true. And thank you so much for talking with us first, of all, best of our wishes to the entrepreneur couple and thank you again for talking with us. you would not believe one of the first episode where we delved so deeply into climate tech and you did it so beautifully. Thanks again for coming here and talking, unfiltered and giving us you gave an overview in such a simple language. So thanks again for it.

Sandeep: Yeah, I also wanted to jump in here. Thank you himanshu for sharing your perspective on tech policy entrepreneurship. This dance is very important to save the climate crisis. And I think you are one of those polymaths who have dabbled in every space, so you can speak from the pains and the highs of every space. So I really appreciate your time as.

Himanshu Gupta: Well, of course, and thanks for having me here and great questions. I hope, your listeners benefit. I know, like, there is a budgeting climate tech community in India, and happy to be, of help, with my experiences. It's been pretty intense last four years, so in whatever way I could help. but also you're running a great program, both of so and of course, as I said, Shreya and I started, we were kids in our career in climate tech. So it's good to see each of our paths, evolve, in similar and yet different ways.

Shreya: And that cross again. Thanks to this podcast.

Himanshu Gupta: Thanks for this. Thank you.


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