altM raises $10.3 million Series A led by Rainmatter and Mela Ventures to turn crop residue into specialty chemicals
The Bengaluru start-up founded by two former Tesla engineers will use the money to move from its pilot plant to a 1,000-tonne-a-year commercial facility by 2028.
India burns or discards millions of tonnes of crop residue every year, and stubble burning after the paddy harvest is a major contributor to north India's winter smog. Bengaluru start-up altM wants to turn that residue into specialty chemicals that are now made from petroleum, and it has raised $10.3 million in a Series A round to scale up. The round was announced on 5 November 2026.
The round
The Series A was co-led by Rainmatter, the climate and impact investment arm backed by Zerodha, and Mela Ventures. Both are new investors. Existing backers Omnivore, Theia Ventures, Aureolis Ventures and Spectrum Impact also took part, along with strategic angel investors. The valuation was not disclosed.
altM raised a $3.5 million seed round led by Omnivore in 2023.
Former Tesla engineers, farm-waste feedstock
altM was founded in 2022 by Apoorv Garg and Yugal Raj Jain, who previously worked together on manufacturing at Tesla in the US. Their bet is that agricultural residues such as sugarcane bagasse and rice straw can be refined into high-value molecules that compete with fossil-derived inputs. Plant biomass is mostly made of cellulose, hemicellulose and lignin. Biorefineries aim to separate these streams and turn each into saleable products, so that no single product has to carry the whole cost of the plant.
According to the company, since the seed round it has taken six molecules to demonstration scale and chosen three for pilot production. Inc42 reports that altM has installed a 70-tonne-per-year pilot plant in Bengaluru's Electronic City. This is a founder-attributed capacity figure, not independently measured production.
What the money will build
The funding is meant to take altM from pilot runs to commercial manufacturing. The company plans a 1,000-tonne-per-year plant by 2028, with a longer-term target of 10,000 tonnes a year. Garg told Inc42 that a large share of the new capital will go into building that next 1,000-tonne commercial plant.
Why it matters
Specialty chemicals are an attractive first market for bio-based materials. Volumes are smaller and margins higher than in commodity chemicals, and many industrial customers face growing pressure to show lower-carbon supply chains. For India in particular, altM's approach brings together three policy goals:
- Lower chemical imports. India imports many specialty and performance chemicals.
- A new income stream for farmers. Residue that is now burned gets a cash value.
- Cleaner air. Using residue that would otherwise be burned could reduce open burning; actual benefits depend on sourcing and process emissions.
A growing bio-manufacturing push
The round comes as India gives more policy attention to biomanufacturing. The government's BioE3 policy supports bio-based chemicals and other biomanufacturing segments, creating a policy tailwind for start-ups that replace petrochemical inputs with biological or biomass-derived ones. Rainmatter's participation also shows climate-focused investors backing companies that carry real hardware and process risk.
The challenges
Biorefining start-ups worldwide have run into the same obstacles, and altM will face them too. It has to secure a reliable, year-round supply of biomass from a seasonal, scattered resource. Its products must match fossil-based molecules on cost and performance before customers will switch. And going from a pilot plant to a 1,000-tonne commercial facility is a significant engineering step for any chemical process.
altM's founders bring manufacturing scale-up experience from one of the world's most demanding production environments. If the 2028 plant comes online as planned, altM would move from pilot operations towards commercial farm-residue chemical production, a model that could be repeated across other agricultural regions.
Sources
- https://inc42.com/buzz/cleantech-startup-altm-raises-10-3-mn-to-scale-manufacturing/
- https://india.entrepreneur.com/business-news/altm-raises-usd-10-3-million-in-series-a
- https://indianstartupnews.com/funding/former-tesla-executives-startup-altm-raises-103-million-to-make-chemicals-from-rice-straw-and-bagasse-12785986
- https://eng.ruralvoice.in/agri-start-ups/altm-raises-10.3-million-dollar-to-scale-specialty-chemicals-production-from-agricultural-residue.html
- https://agrospectrumindia.com/news/9/35111/-specialty-chemicals-startup-altm-raises-10-3-mn-in-series-a-funding.html
- https://app.dealroom.co/news/note/altm-raises-10-3m-to-turn-farm-waste-into-fossil-free-chemicals
- https://www.entrepreneur.com/en-in/news-and-trends/biomaterials-startup-altm-raises-35-million-seed-funding/458678