As climate change issues become increasingly evident, bringing about threatening natural disasters and economic devastation, there has been an uptick in companies focussing on sustainable business models and carbon footprint reduction. Climate tech in Southeast Asia is gaining greater attention than it has in other countries, especially as the region is most likely to bear the brunt of an ecological disaster. In addition, the global pandemic, coupled with environmental awareness, has led many startups to reassess their work policies, allowing many employees to work from home and accelerating digitalisation initiatives.
With the United Nations pushing its Sustainable Development Goals (SDGs), the climate tech startups Southeast Asia adopting these ideals as well. Recognition of what is now a serious threat to life on the planet is encouraging many businesses to pivot or find new ways to sustain their economic goals while conserving the environment. Investment in the climate tech sector is also on the rise, as venture capitalists, angel investors, and government-backed environmental, social and corporate governance (ESG) programmes evaluate sustainability and eco-credentials when considering funding.
Are Southeast Asian economies ready to weather a challenging global climate?
Changing investment landscape
There is still a long way to go, with an estimated $2 trillion USD needed over the next decade to transition the region to more environmentally sound initiatives and infrastructure. Currently, the fintech and Web3 development industries are receiving majority of the economic attention.
However, as desire for change grows, some startups are taking off and receiving the attention and investment they require to accelerate the transition to more environmentally friendly business practices and services. Let’s take a look at the four companies making waves in climate tech in Southeast Asia.
Third Derivative
This venture capital and accelerator programme, which has an operational base in Singapore and is a collaboration between Rocky Mountain Institute (RMI) and New Energy Nexus, , aims to encourage climate innovators. It connects startups in the climate tech sector, allowing them to receive funding and mentorship as they grow their businesses.
Since its inception in 2020, Third Derivative has invested in 8 projects and aided a number of environmentally focused startups in their mission for investors and mentors.
EQUO
With single-use plastics wreaking havoc on the environment, Vietnam-based startup EQUO set out to develop alternatives that people would really use. Under the guidance of founder Marina Tran-Vu, it started wotj a grass drinking straw in 2020 and has since expanded to include a vareity of environmentally friendly straws, utensils, and tote bags.
With innovative products such as coffee grind straws and sugarcane cutlery, the company has received $1.4 million USD in funding from pre-seed and seed rounds. NextGen Ventures was the primary investor in the $1.3 million USD seed round in April 2022, allowing fledgling startup to continue developing new, eco-friendly products.
Quest Ventures
While more businesses realise the importance of environmental awareness and the future of the human race, Quest Ventures is already ahead of the game. This venture capital fund, which was founded in 2009, has focused on startups that take an ESG approach to business since 2018.
The company has always recognised the importance of investing in digital innovations, and has refined its criteria to include ESG principles. Quest Ventures, located in Singapore, has made 93 investments and contributed to three funds in APAC, including recent investments in Filipino company Kraver’s Canteen, Malaysia-based Howuku and Indonesian startup GuruInovatif.
OFF FOODS
Food poverty is one of the biggest threats of climate change, so finding solutions to this potential issue is essential, particularly in a country with the largest population in the region. OFF FOODS, based in Indonesia, is working on an alternative protein source that tastes like chicken.
Since releasing its first batch of plant-based meat substitutes, the foodtech startup has continued to improve its more eco-conscious products, thanks to $1.7 million USD in seed funding led by Alpha JWC Ventures. It has also worked with a number of F&B companies in order to reach a wider audience, and it plants to grow regionally by 2024.
The climate tech startups Southeast Asia is sprouting are all working towards reducing environmental harm while providing sustainable solutions for future ecologically safe economic growth. As the world teeters on the brink of a catastrophic disaster, more companies in the region must evaluate the impact their operations on the environment, local residents, and ASEAN’S future economic stability.
By using digitally and technologically innovative approaches to address the ESG concerns that threaten the world, the startups in climate tech in Southeast Asia are paving the way for a brighter future. Their achievements and the effects they have may benefit the whole world and spare the region from complete devastation.