Indian cooling solutions company Tan90 has raised Rs. 11.32 crore ($1.37 million) in a pre-Series A investment round co-led by Blue Ashva Capital and Capital A.

Tan90 said in a statement on Wednesday that the round also saw participation from 3i Partners and a clutch of angel investors based out of Singapore, the Middle East, and India.

It said the main purpose of this round is to expand overseas with a particular focus on Southeast Asia.

Tan90 is also planning to enter Tier-2 cities in India to cash in on the growing demand for ‘cold chain solutions’ in the interior parts of the country.

“We are delighted to have secured this funding, which will support our expansion and enable us to introduce an innovative CaaS model to a wider audience,” said Soumalya Mukherjee, Tan90 Co-Founder.

“We are pioneering this segment in India, and given the fact that India is the fastest-growing cold chain market globally, we hope to create substantial impact in this space by expanding our footprint in major cities like Mumbai, Kolkata, Kochi and Visakhapatnam in the coming quarter, 

“We are confident in our capabilities to transform the cold chain industry and deliver sustainable and cost-effective solutions,” he added.

According to the statement, tier-2 cities still rely on rudimentary solutions like ice and dry ice, which the company is aiming to replace with energy efficient and cost-effective passive coolants like Phase Change Materials (PCMs).

It is noted that PCM panels or sachets can store thermal energy and, just like electrical batteries, provide passive support where grid power is expensive or unavailable.

The company is launching a unique cold chain model, ‘cooling as a service’ (CaaS), where it offers cooling solutions on lease to businesses that do not own blast freezers required to freeze the panels, i.e., thermal batteries.

The technology is very similar to battery swapping, where the customers do not have to worry about asset cost, asset management, manpower costs or inventory. 

Through this initiative, the company is focusing on democratizing the cold chain, which is still limited to asset availability at the customer’s end.

According to the firm, cold chain is a necessity now, given the rising incidence of heat waves and global warming.

It said CaaS can prove a game changer for small businesses that can now transition away from dry ice, which is dangerous to handle and use.

Moreover, dry ice is a consumable, and its supply chain issues create havoc on daily operations of many businesses like ice cream vendors.

CaaS is already being offered in five cities — Pune, Hyderabad, Delhi, Chennai, and Bangalore — where it has proved to reduce operational costs by 25 percent compared to reefer trucks.

“We have strong faith in the India growth story as it is a vast economy which is going to record above 6 percent growth in all likelihood this fiscal year,” said Satya Bansal, Founder at Blue Ashva Capital.

According to him, there would be tremendous growth for the cooling solutions business in the country as well, since it has strong linkages with the food, pharma, energy, logistics and transport sectors.

“Our second round of investment in the company signifies our continued faith in its business strategy and growth prospects,” he said.

Ankit Kedia, Founder at Capital A, said the thermal solutions sector has magnificent growth potential, especially due to the global tectonic shift in energy resource and distribution business in response to the crucial climate challenges.

“We believe Tan90 is best positioned in the industry to offer energy-efficient cooling solutions and grab substantial market share as it has proprietary cooling technologies,

“We found tremendous value to be associated with such a company,” he added.

As part of its strategy, the company is aiming to invest in research and development (R&D), specifically in the areas of space cooling and data center cooling.

Further, the company is exploring options to enter the European Union markets where carbon credits are in place.

Cooling is in great demand when buildings, HVAC and data centers are in question, and offsetting costs by incorporating passive coolants like Phase Change Materials is a game changer.

Earlier, Tan90 entered the Philippines market, in collaboration with USAID, and made a big impact in the country’s fisheries industry.

By eliminating the use of ice, Tan90 was successful in bringing out a 40 percent reduction in the clients’ operational costs, resulting in improved food quality, volume optimization and reduced wastage.

Founded in January 2019, Tan90 is is disrupting the cold chain industry through its proprietary passive cooling solutions that enable clients to transport their perishables with any logistics service including electric vehicles.

The firm has moved more than 1500 tonnes of produce and has reduced carbon emissions by more than 25 percent in the process.

India’s Ripplr raises $40M in Series B funding led by Fireside Ventures