Headline & intro
Corporate climate strategy is quietly being rewritten from Bangalore and Abidjan, not just from Zurich and San Francisco. India’s Varaha, a three‑year‑old startup, has just raised fresh capital to turn smallholder farms and industrial by‑products across the Global South into high‑integrity carbon removal. Behind that headline sits a bigger shift: as AI and data centres drive up emissions, wealthy companies are looking for cheaper, scalable ways to neutralise their footprint. In this piece we look at what Varaha’s model really changes, how it could reshape the carbon market – and what it means for European buyers and regulators.
The news in brief
According to TechCrunch, India‑based climate tech startup Varaha has secured $20 million as the first tranche of a planned $45 million Series B round. The round is led by WestBridge Capital, which is making its first climate tech investment, with participation from existing backers RTP Global and Omnivore.
Founded in 2022, Varaha develops carbon removal projects across Asia and Africa, focusing on four pathways: regenerative agriculture, agroforestry, biochar and enhanced rock weathering. The company says it has removed over 2 million tonnes of CO₂ across 14 active projects and generated around 150,000 verified carbon removal credits through registries such as Puro.earth, Verra, Gold Standard and others.
Varaha works mainly with smallholder farmers in India, Nepal, Bangladesh, Bhutan and Ivory Coast, covering roughly 1.7 million acres and 170,000+ farmers. It reported about $4.76 million in revenue last financial year from delivered credits and expects this to grow to roughly $22 million while remaining profitable. Long‑term offtake deals include Google, Microsoft, Lufthansa, Swiss Re and Capgemini. The new funding will support expansion across South and Southeast Asia and an industrial partner programme for biochar‑based removals.
Why this matters
Varaha is not just another carbon marketplace; it is a bet that climate infrastructure will be built where it is cheapest to operate, then exported as a service to the rest of the world. That is a profound shift for an industry that has been dominated, in narrative and capital, by Western startups building expensive, hardware‑heavy solutions like direct air capture.
Winners and losers.
- Winners: large emitters with growing electricity demand from AI and cloud – especially tech and aviation – gain access to lower‑cost, ostensibly high‑integrity removals. Smallholder farmers in the Global South get a new revenue stream layered on top of their land.
- Potential losers: carbon removal developers in high‑cost markets whose business models depend on premium prices. If Varaha and similar players can meet the same verification standards at a fraction of the cost, some incumbents will be forced up the quality curve (more durability, more co‑benefits) or out of the market entirely.
Problem solved – and created.
Varaha’s execution‑first model addresses a key bottleneck: many high‑tech carbon removal approaches are not scaling fast enough or cheaply enough to meet near‑term corporate demand. By standardising project design, measurement, reporting and verification (MRV) across large geographies, Varaha can aggregate millions of tonnes of potential removals.
But it also raises uncomfortable questions about climate justice and dependency. Are we creating a world where the Global South becomes the “carbon sponge” for the AI‑driven lifestyle of the Global North, with project risk and land‑use trade‑offs borne locally while balance‑sheet benefits accrue elsewhere? The answer will depend on how transparently revenue is shared and how rigorously permanence and social safeguards are enforced.
Competitive landscape.
The more Varaha proves that large‑scale, verification‑grade projects can be run from India at a profit, the more it legitimises a new class of climate infrastructure platforms headquartered in emerging markets. For European and US developers, the message is clear: cost discipline and field execution now matter as much as frontier science.
The bigger picture
Varaha’s rise sits at the intersection of three trends that have been building for years.
1. From avoidance to removal.
Corporate buyers are under growing pressure to move away from cheap "avoided deforestation" offsets and towards true removals. Scandals around over‑credited forestry projects and weak baselines have damaged trust in traditional offsets. Biochar and enhanced rock weathering – two of Varaha’s core methods – are seen as more durable and easier to quantify, aligning with emerging guidance from initiatives like the Integrity Council for the Voluntary Carbon Market.
2. Industrialisation of MRV.
Carbon projects used to be artisanal: consultants in SUVs, spreadsheets, and audits every few years. Today, scalable MRV is a software and data problem. Satellite imagery, soil sensors, farmer apps and machine‑learning models are turning dispersed plots into something that can be measured and verified at registry‑grade quality. Varaha’s claim that “tech becomes open source, execution wins” is really a statement about commoditisation: once the MRV stack is standard, advantage shifts to whoever can deploy it across the most hectares at the lowest overhead.
3. AI’s hidden climate bill.
Hyperscalers like Google and Microsoft are simultaneously driving the explosion in AI computing and signing huge carbon removal offtakes. As AI models get larger and inference becomes ubiquitous, their Scope 2 and 3 emissions grow. Buying removals from lower‑cost geographies becomes not just CSR but a material cost item. Varaha is positioning itself as part of that “climate hedge” for the AI boom.
Historically, we’ve seen a similar pattern with manufacturing and IT services: high‑margin innovation in the West, large‑scale execution in Asia. Varaha suggests that carbon removal could follow the same route – with the crucial caveat that this time the resource being outsourced is not labour, but land and ecosystems.
The European / regional angle
European companies are already on Varaha’s customer list – Lufthansa, Swiss Re, Capgemini – and that list is likely to grow for one simple reason: regulation. The EU’s Corporate Sustainability Reporting Directive (CSRD), evolving rules on green claims, and upcoming standards for carbon removal accounting are squeezing out low‑quality offsets. Buyers will either pay more for durable removals in Europe or source equivalent integrity at lower cost abroad.
This is where Varaha becomes strategically interesting. By working with international registries recognised in European markets, it offers a bridge: credits generated on farms in India or Ivory Coast, structured to be acceptable under EU‑level scrutiny. For sectors like aviation, where in‑sector decarbonisation is slow, such options are politically and financially attractive.
However, there is a regulatory catch. The EU’s Green Claims initiative and consumer‑protection authorities are pushing back against vague “carbon neutral” labels that rely entirely on offsets, especially those generated outside Europe. Companies using Global South removals will need to clearly distinguish between deep emissions cuts and residual emissions neutralised through projects like Varaha’s.
For European climate‑tech startups, Varaha is both a competitor and a potential partner. Berlin or Stockholm‑based MRV software vendors could plug into Varaha’s field operations. Conversely, asset‑heavy European removal companies (e.g. direct air capture in Iceland) might find themselves compared unfavourably on cost unless they can justify much higher durability or co‑benefits.
Looking ahead
Expect three developments over the next three to five years if Varaha executes on its vision.
1. Consolidation around large platforms.
Small, single‑country project developers will struggle to compete with firms that can run multi‑pathway, multi‑country portfolios with shared MRV infrastructure. Varaha’s industrial partner programme – letting others generate biochar credits using its systems – pushes it towards a platform role rather than a pure project owner. That sets the stage for acquisitions or franchise‑style expansion.
2. Rising scrutiny of Global South removals.
NGOs, local communities and Southern governments are unlikely to accept a repeat of past offset controversies. Expect stronger demands for transparent benefit‑sharing, local co‑ownership, and tighter oversight of land‑use impacts. European buyers will be held responsible by regulators and media for what happens on the ground in their supply of credits, not just for what the registry paperwork says.
3. Integration into corporate planning, not CSR.
As Varaha’s CEO correctly points out, carbon credits are moving from the charity budget to the P&L. That will force procurement teams to benchmark cost per tonne across technologies and regions. If Varaha can reliably deliver sub‑$100, verification‑grade removals at scale, it will set a reference price that ripples through boardrooms from Frankfurt to Seattle.
The open questions are significant: How durable are the claimed removals over 100+ years? Can farmer engagement stay robust as programmes scale to millions of participants? And will Indian and African regulators decide they want more control – or higher taxes – on the export of environmental assets?
The bottom line
Varaha is an early signal that the centre of gravity in carbon removal may shift towards the Global South, not just for cheap offsets but for high‑integrity climate infrastructure. For Europe’s climate‑conscious companies, this opens a new toolbox – and a new set of ethical and regulatory dilemmas. The key question for the next decade is not whether Global South removals will scale, but on whose terms: will they be designed as a fair partnership, or as yet another outsourced cost centre for the AI‑powered North?
