Karunakaran said that Buyofuel is currently in talks with several venture capital funds to secure the capital needed for its next growth phase, with the biofuel sector playing a key role in India’s sustainable future. The Founder refrained from naming potential sponsors for the fundraising, noting that the process is still in its early stages.
In recent months, Buyofuel has posted positive financial results, including a positive EBITDA for the last 3-4 months and profitability since January. Karunakaran attributes these achievements to the company’s commitment to operational efficiency and maximising resources.
“The conditions for funding are getting stricter, and investors are becoming more focused on operational efficiency and whether a business can turn profitable,” Karunakaran said. “While this presents a challenge, it also offers an opportunity. We’ve had to become more efficient, which is exactly what the current market demands.”
Looking ahead, Karunakaran emphasised that the next phase of Buyofuel’s growth will require more substantial funding. “The next large growth phase will require more funding for us. We believe we can get the right kind of funding to take us to the next level of growth,” he added.
The funding will primarily be used to enhance Buyofuel’s tech platform, especially in connecting rural waste sellers to the biofuel value chain. Currently, a significant amount of waste is either sent to landfills or incinerators, missing the opportunity to be converted into biofuel. Buyofuel plans to bring more types of waste into the value chain, increasing the quantity of waste converted into biofuel and reducing the environmental impact of improper waste disposal.
“More waste goes to landfill incinerators now, but we aim to change that,” Karunakaran said. “We want to bring small amounts of waste into the value chain, and by doing so, we can create more value and reduce pollution.”
In addition to scaling up the business, Buyofuel is also working to monetise carbon credits as part of its revenue cycle. This aligns with the global push towards net-zero emissions and makes the startup an even more attractive investment for venture capitalists and impact investors. As more millennials become decision-makers, the shift toward biofuel is expected to accelerate, as per Karunakaran.
Karunakaran also highlighted the regulatory challenges facing the biofuel sector, noting the lack of clarity in policy and the fragmented nature of the supply chain. “The regulatory environment remains unclear, and the biofuel supply system is fragmented,” he said. “This is where Buyofuel steps in—we provide an organised supply system to make biofuel more accessible and scalable.”
