Startup Deep Dive : Carbon Masters — the Bengaluru bio-CNG maker that waited eight years for its first funding round

Carbon Masters spent its first four years advising European companies on cutting their carbon footprints from a rented desk on the University of Edinburgh campus, not making a rupee from waste. It took a rejected telecom consulting pitch in 2012 to push its founders toward Bengaluru’s garbage instead, and by FY24 the pivot had produced a company booking Rs 8.94 crore (~$931,000) in revenue from bottled cooking gas made out of kitchen scraps (as per MCA filings via Tracxn and Tofler).

Three funding rounds later – in 2017, 2020 and 2025 – not one of them has disclosed an amount that lets an outsider compute a valuation. That contradiction sits at the centre of Carbon Masters: a company old enough to have missed India’s entire compressed-biogas boom cycle, yet one its founders say only turned cash-profitable, unit by unit, in the financial year that just ended.

Quick facts

What they do

Carbon Masters collects segregated organic waste – restaurant scraps, market refuse, agricultural residue – and runs it through anaerobic digesters to produce two things: compressed biogas, bottled and sold under the Carbonlites brand as a substitute for LPG cylinders in commercial kitchens and for CNG in transport, and a bio-enriched organic manure sold to farmers as a by-product. It operates five compressed biogas (CBG) plants across Karnataka, Telangana and Tamil Nadu, processing more than 36,000 tonnes of municipal solid waste a year, and runs a 50:50 joint venture called Sustainable Impacts with Hasiru Dala Innovations that operates a licensed wet-waste facility at Harohalli near Bengaluru (as per Indian Startup News, September 2025, and Hasiru Dala Innovations). Its customers span restaurants and bulk food-service kitchens buying Carbonlites cylinders, industrial and backup-power users, farmers buying its fertiliser, and, more recently, gas utilities after the Harohalli plant secured GAIL clearance to inject biomethane directly into the city gas pipeline.

The origin

Som Narayan and Kevin Houston met in September 2008 in a master’s programme in carbon management at the University of Edinburgh. Houston, a former Procter & Gamble executive and IBM consultant then in his sixties, has said he was pushed toward the climate sector after watching Al Gore’s climate documentary; Narayan, in his twenties, held degrees in environmental engineering and environmental law. In May 2009 the two set up Carbon Masters out of an office on the university’s campus, backed by a 10,000-pound interest-free incubator loan, with four employees advising businesses – among them the European Commission, Edinburgh Airport, Pfizer and the Ecuadorian utility Adelca – on cutting their carbon footprints (as per Forbes India, 2017). It was consulting work, not waste management: the biogas business that would come to define the company did not exist yet. Narayan returned to India in late 2011 when his UK visa expired, and the pair began looking for a business the Indian arm could actually run.

The struggle years

The first attempt at an Indian pivot was not biogas. In 2012, the founders tried to break into telecom-tower energy management, did pro bono work to prove the model, and were turned down when it came to a paid contract – a dead end that Forbes India’s 2017 profile of the company records without much romance. The real redirection came in February 2013, when Carbon Masters struck a deal with Maltose Agri Products to build a 200 kg-a-day biogas facility in Doddaballapura, a small pilot next to the vegetable market it drew waste from. It was a fraction of the scale the company would eventually need, and for two more years fundraising went nowhere: Houston has said plainly that “we just did not know how to raise funds” during the 2015 scouting period, and had by then put in roughly Rs 50 lakh of his own capital just to keep the plants running (as per Forbes India, 2017). A company that had spent six years since its Edinburgh founding without a proven revenue model, and had just failed at its first Indian pivot, was not an obvious bet for outside capital – which is precisely why it took until 2017 for institutional investors to commit.

The turning point

The event that changed the trajectory was industrial, not financial. In November 2013, Mahindra & Mahindra ran a fleet of its own trucks on Carbon Masters’ biogas and took enough interest in the boardroom that, by April 2016, the two had signed an agreement for Mahindra Powerol to back an eight-year facility near Malur, about 50 km from Bengaluru. Mahindra put in Rs 7 crore to build the plant (as per Forbes India, 2017; and SustainabilityNext, July 2017, which independently reported the Malur unit’s construction). The contrast in scale either side of that deal is the clearest way to see the turning point: the Doddaballapura pilot in 2013 processed 200 kg of waste a day; the Malur plant that followed was built for roughly 1,600 kg of bio-CNG output a day, an eightfold jump that came from one industrial partner’s balance sheet rather than years of organic growth. By 2017-18, the company was processing around 35 tonnes of wet waste daily across its operations to produce roughly 1,000 kg of bottled bio-CNG and 10 tonnes of organic fertiliser a day, sold into eight Bengaluru restaurants with plans to expand to eight more cities (as per Forbes India, 2017).

The money behind it

Carbon Masters has raised money in at least three identifiable rounds, and every one of them has kept the amount partially or fully undisclosed on valuation:

• June 2017: Rs 4 crore from Indian Angel Network (led by investors Nagaraja Prakasam and Mridula Ramesh) and Sangam Ventures, a Shell Foundation-backed clean-tech fund; both Nagaraja Prakasam and Sangam Ventures founder Karthik Chandrasekar joined the board (as per Forbes India, 2017; SustainabilityNext, July 2017).
• January 2020: a Rs 3 crore top-up round, with Nativelead’s Native Angel Network contributing Rs 1.70 crore of it alongside continuing investors Indian Angel Network and Sangam Ventures (as per Naga the Farmer/Nativelead release, January 2020).
• September 2025: an undisclosed fresh equity round led by Schneider Electric Energy Access Asia (SEEAA) – described by Energetica India as a “follow-on” investment, implying an earlier, unreported SEEAA cheque – together with Sangam Ventures and Indian Angel Network Group, plus individual investors Sriram Sankaran (managing director, Synchron Group) and Muthu Murugappan (CEO, Murugappa Group). Vikram Raman of SEEAA and Sankaran both joined the board, and Ostara Advisors ran the process (as per Indian Startup News, BioEnergy Times and Entrackr, all September 2025).

What each backer changed: Sangam Ventures brought sector-specific clean-tech underwriting and a board seat that has stayed since 2017; Indian Angel Network supplied the earliest institutional capital and repeat top-ups over eight years; Schneider Electric Energy Access Asia brought a global energy-access strategic partner and, per its own release, is backing the company’s plan to fund five new special-purpose vehicles for further plants. No round has disclosed a post-money valuation, so – unlike better-covered Indian startups – there is no verifiable number to cite for what Carbon Masters is worth today.

How it makes money

Money comes in from several lines built around the same waste stream, and the company has described its model consistently across two separate periods of press coverage:

• Bottled Carbonlites bio-CNG sold to restaurants, commercial kitchens and industrial/backup-power users as a substitute for LPG and diesel (as per Naga the Farmer, January 2020; Climate Angels).
• Bio-enriched organic manure, the digestate by-product of the same biogas process, sold to roughly 5,000 farmers (as per Climate Angels).
• Plant operation and ancillary infrastructure fees, where Carbon Masters is paid to run or supply equipment for biogas facilities it does not fully own (as per Naga the Farmer, January 2020).
• Carbon advisory and consulting services, a hangover from its original Edinburgh business line (as per Climate Angels).
• Carbon Guru, a software-as-a-service product, and fee income from a Carbon Masters Training Institute (as per Climate Angels).

The part people usually get wrong is treating this as a fuel-sales business first. In 2017, when Carbonlites was priced at about Rs 60/kg against LPG at roughly Rs 65/kg, the company’s own founders were already talking about the fertiliser and plant-operating income as central to the model, not incidental to it (as per Forbes India, 2017); the 2025 funding round’s stated use of proceeds – scaling the fertiliser portfolio alongside biomethane capacity – points the same way. On costs, waste collection and segregation logistics are the persistent drag (which is why the Hasiru Dala joint venture, bringing waste-picker collection expertise, exists at all), and the company says it is “already EBITDA-positive across majority of our operating units and turned PAT-positive in FY 2024-2025,” per CEO Som Narayan (as per Energetica India, September 2025) – a company-stated claim, not an audited public disclosure.

The numbers

Public financial detail on Carbon Masters is thin outside its Indian statutory filings, and the company does not publish multi-year audited statements. What is verifiable:

Two things follow from this table. First, the FY13-to-FY24 trajectory is real but the middle years (2018-2023) have no public revenue figure at all, so the growth path cannot be smoothed into a clean curve – it can only be bookended. Second, the FY25 numbers mix a hard filing-derived margin ratio with a company-stated profitability claim; the underlying rupee profit figure for FY25 has not been made public, so this article reports the margin percentage rather than inventing an absolute number from it. A 2025 company projection, cited by Climate Angels, targets revenue “reaching nearly INR 400 crore by March 2030” – a forward-looking, company-supplied target, not an actual, and it implies roughly 45x growth over six years from the FY24 base, a rate this piece treats as aspirational rather than as fact.

Where the money comes from

Carbon Masters’ revenue splits along two axes: what it sells, and where it operates.

• By product: bottled bio-CNG for commercial kitchens and transport/power users; bio-enriched organic manure for farmers; plant-operation and equipment fees; carbon advisory, software and training (as per Climate Angels; Naga the Farmer, January 2020).
• By geography: five operating CBG plants spread across Karnataka, Telangana and Tamil Nadu, with the flagship Sustainable Impacts joint-venture plant at Harohalli near Bengaluru; the original Edinburgh entity still carries the carbon-advisory line internationally, and Climate Angels lists a further presence in Quito, Ecuador, with US expansion under discussion (as per Indian Startup News, September 2025; Climate Angels).
• By customer type: restaurants and bulk food-service kitchens; industrial and backup-power buyers; roughly 5,000 farmer customers for fertiliser; and, since the Harohalli plant’s GAIL pipeline clearance, city gas distribution networks as an offtake channel for injected biomethane (as per Hasiru Dala Innovations; BioEnergy Times, September 2025).

The surprise, given how the brand is marketed, is that the company’s own account of its business puts almost as much emphasis on fertiliser, software and consulting income as on the bottled-gas product that carries the Carbonlites name in every headline.

The risks

• Feedstock and collection dependency: the entire model depends on a reliable, segregated wet-waste supply from municipal or bulk generators; Carbon Masters addresses this by co-owning the Sustainable Impacts joint venture with Hasiru Dala Innovations specifically for collection and segregation, which is itself an admission that this is not a problem the company can solve alone (as per Hasiru Dala Innovations).
• Sector-wide policy underperformance: India’s SATAT scheme, launched in 2018, targeted 5,000 compressed-biogas plants nationally by 2023-24; as of March 2025, the Ministry of Petroleum and Natural Gas’s own annual report recorded only about 100 CBG and biogas plants commissioned nationwide, with a further roughly 130 commissioned by November 2025 per trade reporting – a shortfall of well over 95% against the original target (as per PRS India’s summary of the MOPNG Annual Report 2024-25; iamRenew, November 2025). A company operating five plants after more than a decade is not unusual in a sector that has itself missed its build-out targets by this margin, but it does mean the pipeline infrastructure, guaranteed offtake pricing and financing environment Carbon Masters depends on has been slower to mature than policy promised.
• Undisclosed-valuation funding pattern: three rounds over eight years (2017, 2020, 2025) have each avoided disclosing amount and valuation in full, which limits independent tracking of dilution, runway or investor returns, and means the company’s own claim of profitability in FY 2024-25 cannot currently be checked against an audited, publicly filed profit and loss statement.

The takeaway

What Carbon Masters demonstrates is that a genuine pivot can take longer to pay off than most startup narratives allow for. The company spent four years as a carbon consultancy before touching waste, another four years failing at a telecom pivot and running a 200 kg-a-day pilot on founder savings, and did not sign its first meaningful capital before 2017 – eight years after it was founded. The industrial partnership with Mahindra, not a venture round, was what proved the model could scale, and it took a further eight years after that for the company to say, in its own words, that it had turned profitable. For a founder reading this as a template: the order mattered more than the speed – proof of physical scale came before institutional capital, and institutional capital came years before any claim of profitability. Skipping that order, rather than taking time to walk it, is usually where waste-to-energy pitches fail before they start.

Frequently asked questions

What does Carbon Masters actually sell?

Bottled compressed bio-CNG under the Carbonlites brand, made from organic waste, sold mainly to restaurants and commercial kitchens as an LPG substitute and to industrial or transport users as a CNG substitute; it also sells the bio-enriched organic manure left over from the same digestion process, plus carbon-advisory and software services (as per Climate Angels; Naga the Farmer, January 2020).

Who founded Carbon Masters and when?

Som Narayan and Kevin Houston, who met at the University of Edinburgh in 2008, founded the company in Edinburgh in May 2009 as a carbon-advisory business; the Indian entity, Carbon Masters India Private Limited, was incorporated on 23 February 2012 in Bengaluru (as per Forbes India, 2017; MCA/Tofler company record).

How much money has Carbon Masters raised, and at what valuation?

At least three rounds are publicly known – Rs 4 crore in June 2017, Rs 3 crore in January 2020, and an undisclosed “fresh equity” round in September 2025 led by Schneider Electric Energy Access Asia, Sangam Ventures and Indian Angel Network Group. No round has disclosed a valuation, so a current total funding figure or valuation cannot be independently verified from public sources.

Is Carbon Masters profitable?

The company says it is “EBITDA-positive across majority of our operating units and turned PAT-positive in FY 2024-2025,” a statement from CEO Som Narayan reported in September 2025 press coverage. This is a company-stated claim rather than an audited public filing; independently verifiable data shows Rs 8.94 crore in FY24 revenue and a 35.86% net profit margin for the year ending March 2025 per third-party ratio analysis of its statutory filings.

How many plants does Carbon Masters operate, and where?

Five compressed-biogas plants across Karnataka, Telangana and Tamil Nadu as of September 2025, processing more than 36,000 tonnes of municipal solid waste annually, including the Sustainable Impacts joint-venture plant at Harohalli near Bengaluru, run 50:50 with Hasiru Dala Innovations (as per Indian Startup News and BioEnergy Times, September 2025).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Forbes India, “Carbon Masters: Fuelling new possibilities,” Social Impact Special, 2017
• SustainabilityNext, “Carbon Masters to Set Up First Bio-CNG Unit in Malur Soon,” July 2017
• Naga the Farmer / Nativelead, “Nativelead leads investment in Renewable Energy start up Carbon Masters,” January 2020
• Climate Angels, “Carbon Masters: Reducing Carbon Footprints” (company profile, referencing March 2025 baseline)
• Indian Startup News, “Climatetech startup Carbon Masters raises funding from Schneider Electric Energy Access Asia, others,” September 2025
• BioEnergy Times, “Carbon Masters raises fresh equity to expand Carbonlites Biomethane and Organic Fertiliser portfolio,” September 2025
• Energetica India, “Schneider Electric Energy Access Asia Boosts Clean Energy with Follow-on Investment in Carbon Masters,” September 2025
• Entrackr, “Carbon Masters raises funds led by Schneider Electric,” September 2025
• Tracxn, Carbon Masters India Private Limited company/financial profile, accessed September 2026
• Tofler, Carbon Masters India Private Limited financial and ratio data (CIN U74999KA2012PTC062682), accessed September 2026
• StartupPedia, “Rainmatter-backed Hasiru Dala and Carbon Masters turn waste into biogas,” September 2026
• Hasiru Dala Innovations, “Startups collaborate to produce bio-CNG, fertiliser from wet waste”
• iamRenew, “130 CBG projects commissioned as biofuels dash in 2025: Petroleum Ministry,” November 2025
• PRS India, “Review of Implementation of CBG (SATAT),” summarising the Ministry of Petroleum and Natural Gas Annual Report 2024-25

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