Asia-Pacific seeing surge in cleantech-focused VC funds
Cleantech became one of the hottest investment sectors among VCs a decade ago with cleantech VC deal volumes doubling between 2005-2007, according to Brookings Cleantech Venture Capital report. And while the global recession in 2007-2008 halted many investments in cleantech, the sector has gained traction over the last few years.
Asia Cleantech Capital is an early-stage investment firm focused on clean tech projects and companies in the APAC region; DreamLabs Innovation is a US$50m fund established to invest in disruptive, scalable, people-focused companies in areas including cleantech and energy; and ENGIE New Ventures runs a US$61.2m fund dedicated to making minority investment in tech startups in sustainable energy including across Asia.
More recently, in 2021, in light of the pandemic and increasing focus on sustainability, there’s been a surge of cleantech-focused VC funds being set up both globally and across Asia-Pacific with the aim of supporting startups that are developing advanced technologies to tackle global problems, whether renewable energy or food waste.
Climate Solutions Partnership unveiled
Just last week, HSBC, World Resources Institute (WRI) and WWF unveiled their Climate Solutions Partnership (CSP), which aims to unlock barriers to finance for innovators developing climate solutions with a focus on startups in Asia developing carbon-cutting technologies, projects that protect and restore biodiversity, and initiatives to help the transition to renewable energy.
Backed by US$100m of philanthropic funding over five years from HSBC, and part of the banking giant’s climate strategy, this partnership will help identify future business opportunities for sustainable innovations, and mobilise finance, including helping startups and next-generation new sustainable approaches.
Spotlight on Japan and China
Set to launch this month is a new cleantech-focused fund targeting investments in Japan, Europe and the US. Sony Group, Suzuki Motor, Mizuho Bank and 15 other Japanese companies have joined forces on a startup investment fund focused on companies that are developing technologies related to digital transformation and decarbonisation.
The fund, set up by California-based VC firm World Innovation Lab (WiL) with a maximum fund size of US$911m and a lifespan of 10 years, will invest in 50-60 startups in the first 3-5 years. Focused on the environmental sector, the fund is set to invest heavily in companies with digital technology, such as software and data analysis tools that can help streamline the operations of large companies, and those developing advanced technologies to tackle global problems, from water shortages to development of plastics-free products.
And the recently launched TDK Ventures, the corporate venture capital arm of Japanese multinational TDK Corporation, is scouting for more industrial tech investments in Asia and especially China, following the recent close of its US$150m TDK Ventures Fund II. This fund is targeting early-stage, global investments in ‘hard tech’ spanning the advanced materials, industrial, robotics, energy, autonomous vehicles, electric vehicles, clean-tech and health-tech verticals.
“This new fund renews our commitment to supporting hard-tech entrepreneurs creating innovations for the greater good,” says Nicolas Sauvage, managing director, TDK Ventures. The materials science field has always been part of the technology sector’s foundation, and as such, it can help the sector address some of the world’s biggest challenges, including sustainability.”
ADB Ventures brings a more sustainable future to Asia
Back in March, ADB Ventures, the Asian Development Bank’s venture capital arm, announced its first two investments since its founding in 2020. ADB Ventures, which aims to pursue environmental, social and governance (ESG) investments in verticals such as FoodTech, AgriTech, HealthTech, FinTech and CleanTech, revealed two green investments, funding Indian electric vehicle manufacturer Euler Motors and Indian CleanTech startup Smart Joules.
The firm is currently partnered with the Ministry for Foreign Affairs of Finland, the Climate Investment Fund, Nordic Development Fund, Korea Venture Investment Corp., and Korea’s Ministry of Economy and Finance to help bring a more sustainable future to Asia.
Nordic Development Fund managing director Karin Isaksson says: “ADB Ventures represents a timely complement to traditional development approaches through the involvement of the private sector in addressing critical climate change challenges. We are pleased to be working with the ADB on this important initiative that has particular relevance in the post-COVID recovery.”
And finally, while not exclusively tech-focused, last month Singapore-headquartered global gaming firm Razer announced the launch of its new (and first) sustainable US$50m fund. The Razer Green Fund aims to invest in environmental and sustainability startups with up to US$1m funding for startups in the seed and series A stages.
How Capgemini is digitally transforming plastic recycling
Struggling to keep up with the pace of demand for its quality recycled plastic, and with a long-term goal to create a truly circular economy for plastics in Southeast Asia, Heng Hiap Industries turned to Capgemini to help them digitally transform and thereby accelerate recycling.
Heng Hiap has been doing a stellar job on the sustainability front for the past 18 years. In fact, the company, which recently secured the Frost & Sullivan 2020 Malaysia Smart Waste Solutions Technology Innovation Award, has been doing such a good job, creating quality recycled plastic from discarded plastic, that the Malaysia-headquartered company can’t keep up with demand from its customers, which span 33 countries and include South Korean appliance manufacturers, Japanese car companies and chose in the building materials sector.
And the reason it can’t keep up is down to its manual and somewhat complication collection processes which rely on pen and paper transactions and in-person negotiations.
Goal to create a plastics circular economy
And that’s where global digital transformation consultancy firm Capgemini comes in. By helping to digitally transform Heng Hiap’s plastic recycling operations – a complicated process which currently involves working with 28,000 domestic plastic recyclers to buy and convert plastic scraps into high performance resin before selling on to clients – Heng Hiap will be able to instead collect more and better-quality plastic by extending its collection infrastructure beyond informal collectors and grassroots recycles, all the way to the household level, via a simplified and user-friendly collection process.
The ultimate goal for Heng Hiap is to create a truly circular economy for plastics by helping its B2B customers address the growing pressure from eco-conscious consumers for greater transparency and traceability. It’s a goal, says Capgemini Southeast Asia’s COO Sumit Nurpuri that not only “challenges the traditional mode of plastic consumption”, but is “set to reshape the future of plastic recycling in the region”
Roadmap to digital transformation
And to help turn Heng Hiap’s goal of a circular economy for plastics into reality, a team from Capgemini’s Applied Innovation Exchange along with specialists in design and digital customer experience, have created a 5-year business model.
According to Capgemini, the team had a clear focus on a number of key success factors. These include leveraging conscious consumers as driving the demand for recycled plastics; making the adoption of the solution attractive to both collectors and consumers; and providing a solution that meets the public compliance and sustainability commitments of the brands that consumers love.
One of the main points proposed is that of a mobile application designed to revolutionise the plastic recycling process by introducing a new way for consumers to recycle their waste.
Through the app, consumers can request a pickup of their recyclables from their doorstep while collectors can respond to requests, plan routes, track consumer satisfaction ratings, and receive payments digitally. Not only does the app make collection easier, it also motivates consumers to recycle their plastic waste through gamifying the process by earning points each time they recycle their plastics. This solution helps introduce a new source of plastic directly from households, that can be sorted and cleaned, and enhances visibility on the transportation and overall processing of plastic waste.
“With integrated traceability and digitsation innovations, we can achieve a greener world and keep waste out of the ground and oceans for good” says Seah Kian Hoe, Founder and MD of Heng Hiap Industries.
About Heng Hiap Industries
As a fully integrated recycling company in Malaysia, it stands out for its contribution to accelerating the development of the country's smart waste solutions space that promotes circular economy-based sustainable practices.
Formed in 2002, Heng Hiap creates high-value and customisable plastic resin products used in specialised niche applications. The first company in the world to be awarded the Ocean Bound Plastic certificate by Zero Plastic Ocean, it is also GRS certified for its 100% recycled materials, and SMETA certified for social compliance. The company stands at the forefront of developing innovative plastics technologies with more than 70% of its output exported to 30+ countries around the world.