In a defining move for India’s sustainable fashion ecosystem, H&M Group Ventures has made its first textile investment in the country, backing AltMat, an innovative materials startup that converts agricultural residues into natural cellulose fibers. The round also drew participation from Rainmatter by Zerodha, Turbostart, and Fashion for Good, reinforcing a growing global consensus: sustainability is not an accessory—it’s the future of fashion’s supply chain.

This investment marks a turning point in the global race to decarbonize textiles, placing India squarely at the forefront of next-generation material innovation. H&M’s participation underscores its evolving role from a high-street fashion giant to a strategic catalyst for circular material ecosystems.

Turning crop waste into circular wealth

Founded by Shikha Shah, hailed as a ‘superstar entrepreneur’ in sustainable innovation circles, AltMat is pioneering a process that transforms crop residues such as banana stems, hemp oil seed stalks, and pineapple leaves into fibers that mimic the look and feel of linen and cotton. AltMat’s proprietary process is 99 per cent more water-efficient than cotton, avoids toxic chemical use, and operates at a fraction of conventional energy requirements. Its fibers are fully biodegradable and microplastic-free, answering one of fashion’s most persistent environmental challenges: fiber pollution.

Equally critical, AltMat’s system is designed to be circular from the ground up. The by-products of fiber production traditionally waste are redirected into bio-energy and sustainable packaging materials, completing a closed-loop model that not only minimizes waste but also creates a secondary revenue stream for farmers. “When I first met Shikha Shah, I was blown away by her tenacity, energy to drive change, and conviction in what AltMat can achieve,” says Laura Coppen, Head of Sustainability Investments at H&M Group Ventures. “AltMat is a very promising material solution, and we’re thrilled to collaborate more closely ahead.” Tackling twin crises of textile waste and crop burning

India’s apparel sector faces a double-edged environmental problem: mounting textile waste and agricultural residue burning, the latter being a major contributor to seasonal air pollution across northern India. By sourcing its raw material directly from farm waste, AltMat provides a sustainable alternative to crop burning one that puts money back in the hands of farmers. This creates a synergistic solution to both climate and livelihood challenges.

Table: AltMat’s circular solution for the textile industry

Scaling sustainable textiles from India to the world

With this infusion of capital, AltMat aims to expand its grassroots supply chains, accelerate R&D, and enhance global scalability. The company plans to partner with leading fashion and home textile brands to integrate its fibers into mainstream production.

AltMat’s mission aligns closely with the H&M Group’s broader sustainability goals, which include achieving net-zero emissions by 2040 and sourcing 100 per cent recycled or sustainably produced materials by 2030. This investment is also expected to open new opportunities for Indian material innovators seeking to tap into the global sustainable fiber market, projected to exceed $65 billion by 2030.

The Next-Gen fiber boom

As per joint Fashion for Good and Boston Consulting Group report, next-generation fibers derived from plant waste, algae, agricultural by-products, and lab innovations are expected to grow from just 1 per cent of the global fiber market today to 8 per cent by 2030. That translates to nearly 13 million tons of new sustainable fibers, reshaping the raw material base of global apparel production.

Table: Growth and drivers for Next-Gen fibers

Beyond environmental benefits, the report estimates that integrating next-generation fibers could reduce brands’ cost of goods sold by up to 4 per cent within five years, thanks to resource efficiency and waste minimization.

India’s emerging role in the global fiber shift

India is fast becoming a hotbed for biomaterial innovation, hosting startups like AltMat, Banofi (banana fiber leather), and Phabio (bioplastic fibers). With abundant agricultural residues, a strong textile base, and rising investor interest, the country is well-positioned to lead the sustainable fiber revolution. The H&M-AltMat partnership is not just an investment, it’s a signal to the global industry that material transformation can begin at the source, with farmers and innovators working together to rewrite the environmental footprint of fashion.

The future is regenerative

As sustainability moves from a trend to a license to operate, material innovation is becoming the new competitive frontier for global fashion brands. H&M’s investment in AltMat is emblematic of this transition a tangible commitment to building a regenerative, low-impact textile economy. For Shikha Shah and her team, this milestone is more than a funding success it’s a validation of their vision to turn agricultural residue into a resource, textile waste into opportunity, and the future of fashion into something truly sustainable.