Kering-backed Merova Fund pumps $30.5 million into India’s Varaha for regenerative agriculture

Mirova, the French climate-focused investment firm backed by Kering and other heavyweights, has invested $30.5 million (€26.4 million) in an Indian climate technology startup. He saw her. This investment will help expand the startup’s regenerative agriculture program, supporting hundreds of thousands of smallholder farmers in northern India.

The deal represents Mirova’s first carbon investment in India, but its structure is unusual. Instead of receiving shares, the Paris-based company is investing the cash, and in return will receive a share of the carbon credits generated over time.

The arrangement forms part of Mirova’s carbon investment strategy, which directs corporate capital into proven emission reduction projects. The company is a subsidiary of Natixis Investment Managers and its backers include Gucci parent Kering, Orange, L’Occitane Group, Capgemini, Unibail-Rodamco-Westfield and MANE. All of these companies seek to offset supply chain emissions through credible carbon initiatives.

Regenerative agriculture – the practice of restoring soil health and enhancing biodiversity through methods such as crop rotation and reduced tillage – is popular. Gaining traction as a practical approach To make agriculture more resilient to climate change. In India, where millions of small farmers face low soil fertility and erratic rainfall, this approach is as much about survival as it is about sustainability.

Founded in 2022, Varaha designs and manages carbon projects across regenerative agriculture, agroforestry and biochar. It works through a network of 48 local partners to implement field operations and its programs monitor these projects in real time, reporting and verifying climate and social outcomes.

Mirova is investing in the Varaha Kheti Project, which works with farmers in the Indian states of Haryana and Punjab to adopt low-emissions practices and generate verifiable carbon credits that can provide an additional source of income. So far, the project covers more than 200,000 hectares and is expected to reach about 337,000 farmers on an area of ​​675,000 hectares as it expands.

Varaha’s approach is rooted in practices tailored to India’s agricultural systems, especially in the country’s rice belt. The startup focuses on direct sowing rice and incorporating crop residue into the soil, a crucial alternative to the widespread practice of burning rice residue after harvest, Madhur Jain, co-founder and CEO of Varaha, said in an interview.

“Instead of burning the residue, you can use agricultural machinery to chop it up on the farm and mix it back with the soil,” he told TechCrunch.

The startup also encourages reduced tillage, by reducing multiple rounds of tillage to just one or two, which helps conserve carbon in the soil and improves the soil’s ability to store more over time.

The startup plans to use Mirova’s investment to help it purchase the machinery needed to implement regenerative practices.

“If you have to do direct sowing of rice instead of transplanting it, which requires a lot of water, you need thousands of direct seeders,” Jain said. “Since this is not a traditional practice yet, the number of seeding machines available in the market is much less than what is required. So you need to go to the manufacturers and get them. Likewise, for crop residue incorporation, you need machines like Happy Seeders and Super Seeders.”

Credits generated under the program will be verified using Verra’s VM0042 methodology, with a revenue sharing model designed to direct proceeds directly to participating farmers. The project is also seeking Climate, Community and Biodiversity (CCB) certification from Verra, a non-profit organization that recognizes land management projects that create co-benefits for the environment, local communities and biodiversity.

While Verra is one of the main organizations that verifies carbon credits globally, it has faced criticism following investigations that suggested some of the projects it approved may have received carbon credits. They overestimated their carbon savings.

Varaha still prefers to use Verra in its regenerative agriculture project because only the nonprofit offers “the most advanced scientific methodology on soil carbon.” Jane said. However, he added that Varaha is not tied to any single registry and works with other leading standards including Puro and Isometric.

“In terms of soil organic carbon, none of Vera’s credits have been questioned so far by anyone,” he said.

In addition to reducing emissions, Varaha technology aims to improve soil health, reduce water use, reduce chemical inputs, increase crop productivity, reduce farming costs, and contribute to cleaner air. The startup also plans to develop programs specifically for female farmers, with the aim of promoting gender inclusion within rural communities.

Varaha’s global reputation was helped by the agreement it signed earlier this year with Google, in what it described as a deal The world’s largest biochar decarbonisation deal. The tech giant will purchase 100,000 tons of carbon dioxide removal credits from the startup by 2030.

Varaha’s investors include RTP Global, Omnivore, Orios Venture Partners, IMC Pan Asia Alliance Group’s Octave Wellbeing Economy Fund, and Japan’s Norinchukin Bank. The startup has raised $12.7 million in venture funding to date, including $8.7 million From last year’s Series A round.