Wavemaker Impact Launches Climate Tech Startup Fund

Wavemaker Impact: A New Venture Builder for Climate Tech Startups

Wavemaker Partners is expanding its commitment to climate technology and sustainability by not only investing in relevant startups, but actively assisting in their creation. The Singapore-based firm has announced the launch of Wavemaker Impact, a venture builder designed to pinpoint viable business prospects, connect with experienced entrepreneurs, and function as a collaborative co-founder during the scaling process.

Initial Funding and Founding Team

Wavemaker Impact intends to secure $25 million for its inaugural fund and is presently seeking founders to collaborate with. The team spearheading this initiative includes Paul Santos, a managing partner at Wavemaker; Steve Melhuish, the founder of PropertyGuru and an impact investor; Doug Parker, formerly the COO of Nutonomy; alongside Quentin Vaquette and Marie Cheong.

Vaquette and Cheong previously oversaw ENGIE Factory, the sustainability-focused Southeast Asian venture arm of ENGIE Group, a leading global utility provider.

Focus on 100x100 Companies in Southeast Asia

According to Santos, Southeast Asia presents numerous opportunities to establish what Wavemaker Impact terms "100×100 companies." These are defined as businesses capable of generating $100 million in revenue while simultaneously mitigating approximately 100 million metric tons of carbon emissions.

The firm has already identified over 50 potential areas for startup development within sectors such as land management and carbon capture, agriculture and food production, industrial processes, and energy.

Validation Through Previous Collaboration

The initial connection between Vaquette, Cheong, and the Wavemaker team occurred when Wavemaker invested in TablePointer, an energy efficiency startup that originated from ENGIE Factory.

Cheong emphasized that this investment served as a significant validation, demonstrating that a structured process, coupled with the right entrepreneurial talent, can yield companies with substantial carbon impact and attract venture capital.

Addressing Climate Vulnerability in the Region

A substantial portion of Southeast Asia’s economy is concentrated in areas particularly susceptible to the effects of climate change. Research indicates that cities like Jakarta, Bangkok, and Ho Chi Minh City face the risk of being submerged by 2050.

Cheong highlighted that 120 million individuals in Southeast Asia depend on coastal regions for their livelihoods, a situation that will be profoundly impacted by climate change. She also noted the lessons learned from the COVID-19 pandemic, emphasizing the interconnectedness of regional stability with the well-being of neighboring countries.

Growing Awareness and a $2.7 Trillion Opportunity

Despite the challenges, Wavemaker Impact’s founders observe a growing awareness and focus on developing solutions. Cheong stated that the regional economy is increasingly recognizing the "green transition," which is projected to represent a $2.7 trillion opportunity.

Regional Emissions and Targeted Business Models

Wavemaker has created a detailed emissions map specifically for Southeast Asia, revealing that land use accounts for 26% of the region’s total emissions. Santos explained that this is a distinctive characteristic of the region, prompting the firm to prioritize business models that can effectively combat climate change and address local emission sources.

Internal Sustainability Initiatives

Prior to launching Wavemaker Impact, the firm initiated an internal program called Green Wave to assess its own carbon footprint and conduct workshops for its portfolio companies. This led to the creation of a pledge encouraging companies to implement further sustainability initiatives as they grow. (Wavemaker has invested in over 140 companies and manages $180 million in assets across its three Southeast Asian funds.)

Addressing Entrepreneurial Concerns

Wavemaker Impact recognizes that even experienced entrepreneurs may hesitate to launch climate tech or sustainability ventures. The firm aims to alleviate these concerns by offering support and guidance.

Cheong recounted a recent conversation with an entrepreneur who expressed feeling the need to "relearn" the field, stating, “Our pitch to him was, come work with us and you can start at least midway in your journey.”

Bridging the Knowledge Gap

Some entrepreneurs may believe a scientific background is essential. Cheong acknowledged the complexity of the energy sector, noting that understanding the nuances of the energy transition requires specialized knowledge. She also pointed out the difficulty of translating academic climate data into viable business opportunities.

Wavemaker Impact’s Value Proposition

Wavemaker Impact intends to provide capital, act as a co-founder, assist entrepreneurs in identifying opportunities, securing initial customers, developing scalable business models, and building effective teams. Santos emphasized the firm’s ability to save time through established processes and a robust network.

Prioritized Opportunities and Potential Ventures

From the 50 identified opportunities in climate tech and sustainability, Wavemaker Impact is prioritizing 20 to match with suitable entrepreneurs. Examples include addressing deforestation in Indonesia, driven by palm oil cultivation, and promoting direct-seeding rice crops to reduce carbon emissions.

Cheong explained that the firm seeks passionate individuals to engage with farmers and develop companies within these areas.

The Intersection of Impact and Profit

Cheong concluded by emphasizing that entrepreneurs often underestimate their ability to contribute to climate solutions. She asserted that building companies with significant scale and growth potential can simultaneously generate venture-grade returns and reduce carbon emissions. “It’s not about impact or profit, it’s the two of those together, and we really believe we need entrepreneurs to make this change.”