1 Over the past two decades, Lok Capital has transitioned from focussing on microfinance to expanding into agriculture, fintech, and now climate initiatives. What strategic factors drove those shifts? How has your definition of ‘impact’ evolved, and where does the circular economy sit in that long-term thesis?

Over the past two decades, Lok has evolved in step with India’s development priorities. We started by expanding access to microfinance and gradually moved into adjacent sectors like agri, fintech, and climate. Each transition is guided by where we saw the most pressing gaps in inclusion and sustainability. Our definition of impact has matured from access to empowerment and now to resilience. In today’s context, that means building climate-ready systems that can sustain livelihoods and enable resource efficiency in the long run. The circular economy naturally fits into this evolution — it represents a shift from linear consumption toward regenerative models that are both economically efficient and environmentally restorative. A core part of our thesis is based upon building resilient supply chains, backing B2B innovations and enabling conscious consumption via D2C brands.

2 The circular economy is gaining prominence as a way to decouple growth from resource use. Within your climate and sustainability lens, do you treat the circular economy as a discrete investment theme or as an enabling approach embedded across agri-tech and consumer? Can you provide 1–2 portfolio examples that illustrate that position?

We look at the circular economy as a design principle that cuts across our portfolio. We look for companies that rethink material use, extend product life cycles, and reduce dependency on virgin resources.

For instance, SuperBottoms demonstrates circularity in the consumer context by reducing disposable diaper waste through reusable, washable alternatives that deliver both convenience and comfort. At the other end of the spectrum, Lakshmithra Finance reflects circularity within mobility by financing pre-owned commercial vehicles—enabling “second-life” use and extending the productive lifespan of assets already on the road.

We also approach circularity from a manufacturing and industrial lens, where design innovation and process efficiency can materially reduce resource intensity. In mobility, we see strong potential in models that extend the usable life of high-value components. Together, these approaches not only lower carbon intensity but also strengthen the resilience of India’s manufacturing and export ecosystem.

2. a) In Lok IV, the focus is on climate and agri-tech. What specific indicators—such as unit economics, technology adoption rates, or behavioural adherence—suggest Can a circular model achieve sustainable scalability in the context of India?

Scalability in circular models depends on three reinforcing indicators – economic parity, behavioural momentum, and ecosystem alignment.

First, when the economics of a circular model reach cost and convenience parity with the linear alternative, adoption becomes self-sustaining. Indian consumers and enterprises are pragmatic; once the circular choice makes financial sense, the transition happens rapidly.

Second, behavioural momentum is strengthening, as technology and social media accelerate awareness. The younger generation is not only adopting new technologies but also shaping social norms around sustainability. Digital communities are turning conscious consumption into a collective movement rather than an individual choice, lowering the behavioural barriers to scaling.

Third, the ecosystem itself is becoming more enabling. From manufacturing and logistics to corporate procurement, we’re seeing a shift toward local sourcing, recycled inputs, and traceable supply chains. Regulatory frameworks such as Extended Producer Responsibility (EPR) and sustainability-linked procurement targets are reinforcing this shift. Together, these drivers create the conditions for circular businesses to scale profitably and sustainably within the Indian context.

3 Mobilising commercial capital for circular economy ventures often presents greater challenges than fintech or health tech. What strategies are employed to structure investments in this sector, thereby enhancing their appeal to mainstream capital providers, particularly given the frequently infrastructure-intensive or consumer-behaviour-driven nature of scaling in this area?

Mobilising commercial capital for circular ventures requires structures that make sustainability commercially legible and bankable. These businesses span manufacturing intensity and behavioural change, so we focus on what reduces risk and signals institutional readiness:

1) Scalable, institution-ready equity
We underwrite with a view to follow-on from mainstream investors: disciplined capital allocation, transparent reporting, robust audit trails, and board-level governance from day one. This de-risks perceived novelty and creates a clear path for later-stage equity.

2) Capital stack discipline
We help founders access and pursue appropriate leverages—term debt, asset-backed facilities, or supply-chain finance so equity remains reserved for R&D, distribution, and team—i.e., value-accretive growth.

3) Strategic capital linkages
We connect founders with CVCs and strategic investors whose supply chains or sustainability roadmaps align with the company’s circular outcomes. These relationships can often provide a lot of validation

4) International capital access (FOs and institutional LP networks)
We leverage our networks with international DFI and commercial pools of capital that have explicit climate mandates. We position companies with credible governance, measurement, and reporting so they qualify for these pools earlier and on better terms.

5) Impact translated into performance metrics
We help teams quantify varied metrics spanning impact—waste diverted, recycled content, emissions avoided, and traceability—with auditable methodologies. These KPIs are integrated into board dashboards, which improves underwriting comfort for both lenders and growth equity.

6) Governance as a financing enabler
We institutionalise board cadence, risk and audit, information security, and compliance. Clean data rooms and predictable MIS shorten diligence cycles, lower perceived risk, and expand the universe of investors willing to engage.

4 When Lok Capital invested in Superbottoms, what specific factors, such as product design, unit economics, acquisition and retention metrics, waste reduction claims, and off-take partners, assured that the business model would yield both financial returns and circular impact?

When we invested in Superbottoms, we saw a rare intersection of consumer insight, strong economics, and authentic sustainability. The brand had achieved early traction not through marketing spend but through a highly engaged community of parents who genuinely believed in the product’s value and advocated it organically. This combination of category creation and grassroots evangelism is what differentiated Superbottoms from typical D2C brands.

From a financial lens, the business displayed strong fundamentals – industry-leading gross margins, a strong repeat rate and clear payback visibility within a single purchase cycle. The product portfolio was built around high-frequency use items with strong retention potential, allowing for efficient CAC recovery and sustainable cohort economics. Every rupee spent on customer acquisition had a visible lifetime return, supported by an active community of over 100,000 mothers who not only purchased repeatedly but also contributed to product feedback and new-user acquisition.

The product design itself was a cornerstone of our conviction. The reusable diapering system addressed real and tangible consumer pain points — leakage, skin sensitivity, and convenience — without compromising on comfort or aesthetics. By solving functional challenges that had deterred adoption of cloth diapering in the past, the brand made sustainable parenting aspirational, not sacrificial. Each reusable diaper replaces roughly 200 disposable diapers over its lifetime, preventing thousands of tonnes of non-biodegradable waste from entering landfills and saving families approximately INR 15,000–20,000 per child. Even today the copies have not been able to take market share – because product design is really defensible. This is a rare case where financial benefit to the customer directly equals environmental impact.

Beyond the product, the community architecture was critical. Superbottoms growth was driven by authentic peer advocacy, with mothers educating other mothers through forums, WhatsApp groups, and social media content. This grassroots marketing model created both emotional loyalty and credible brand storytelling, making sustainability relatable at a household level. It also enabled the company to scale customer acquisition with minimal paid media dependence, a trait that gives circular brands defensibility in cost-conscious markets.

On the impact side, Superbottoms represents circularity in its purest form, eliminating waste at the source. The company’s commitment extends beyond diapers to adjacent products like training pants and reusable period underwear, reflecting an ecosystem approach to waste reduction in daily life. The brand also engages in active lifecycle education, helping customers understand wash care, durability, and reuse — embedding circular thinking into consumer behaviour.

From an investment structuring perspective, our thesis was equally clear. We saw a high-margin consumer business built on recurring use, a trusted community moat, and real environmental outcomes—a combination that satisfies both commercial and impact criteria. The governance and operational discipline demonstrated by the founding team reinforced our confidence in scalability. Their consistent focus on quality, transparent supply chains, and responsible marketing made it a model case for how circular innovation can be mainstreamed in India.

In summary, Superbottoms validated our belief that sustainability can drive and not follow consumer adoption when the product delivers tangible value, emotional resonance, and measurable impact. It exemplifies how circular consumer brands, when designed around real needs and supported by community, can achieve both scale and profitability while creating lasting environmental change.

5 Lok Capital has historically pioneered investment in numerous underserved markets. Looking ahead, what role do you envision Lok Capital playing in shaping India's impact landscape? Furthermore, beyond the circular economy, what are the most significant unaddressed opportunities for impact capital in India, and how will Lok strategically position itself to capitalise on them?

Looking ahead, we see significant untapped potential in areas such as climate-smart agriculture, waste-to-value manufacturing, and conscious consumer products, industrial decarbonisation, and e-mobility. Additionally, we also see significant opportunities in formalisation of the labour markets in India, which will increase disposable incomes and create furthermore opportunities in what we like to call the 3Cs of India’s future: credit, climate and consumption. Our strategy will continuously evolve with the emerging needs of India and we will continue to back entrepreneurs who blend commercial rigour with climate adaptation and resilience and/or enabling inclusion in India.

6 Circular economy models often rely on consumer adoption (e.g., switching from disposable to reusable products). What frameworks or de-risking mechanisms do you apply when assessing whether adoption can move from niche to mainstream?

Behaviour change is often seen as the hardest part of any circular model, but it follows a recognisable pattern. Over time, our learnings from two strong brands in the Lok portfolio, SuperBottoms and Akshayakalpa Organic, have shown that consumer adoption can move from niche to mainstream when three conditions align: a clear value proposition, community reinforcement, and habit formation.

First, adoption begins when the product delivers tangible consumer value, not just sustainability. Consumers embrace circular choices when they also offer superior functionality, comfort, or cost efficiency. SuperBottoms succeeded because it solved real pain points for parents such as leakage, skin sensitivity, and affordability. Sustainability was not a trade-off; it was an added advantage. Akshayakalpa Organic resonated with families seeking healthier, chemical-free nutrition. Its model connected the benefits of traceable, antibiotic-free milk directly to personal wellbeing. In both cases, consumers made the switch because the circular choice was also the better choice.

Second, community plays a defining role in de-risking adoption. SuperBottoms built one of India’s most active parent communities, where thousands of mothers share experiences, educate new users, and normalise sustainable diapering. This peer-led advocacy replaced traditional advertising and built deep trust. In Akshayakalpa, the community exists at both ends of the value chain: empowered farmers who follow regenerative practices and urban consumers who value transparency and purity. The trust loop between producer and consumer forms a powerful social validation layer that accelerates adoption.

Third, long-term adoption depends on habit formation. Once consumers integrate a sustainable product into their daily routine, such as washing and reusing a diaper or subscribing to organic milk, the behaviour becomes intuitive. We actively monitor repeat purchase cycles, subscription renewals, and referral rates as indicators of habit formation. Both SuperBottoms and Akshayakalpa show exceptionally high retention metrics, proving that when circular products deliver consistent quality and convenience, they become part of everyday life.

Beyond these behavioural levers, we also assess category readiness and ecosystem support. Categories linked to health, parenting, and nutrition tend to scale faster because they combine personal benefit with environmental or social consciousness. Both SuperBottoms and Akshayakalpa illustrate how purpose-driven brands can bridge these motivations, delivering individual utility while advancing collective sustainability.

In our view, behavioural change is not a barrier but a design challenge. The key lies in making sustainable products functional, trustworthy, and convenient so that consumers no longer see them as alternatives. Our experience with SuperBottoms and Akshayakalpa shows that when value, community, and habit align, circular models can achieve mainstream acceptance while building enduring consumer loyalty and measurable environmental impact.