Entrepreneurship in green ventures witnesses upsurge

Vietnam-based sustainability company EQUO provides fully plastic-free and compostable solutions made of materials like coffee, coconut, and sugarcane to replace single-use plastics. In April, EQUO raised $1.3 million in seed funding.

Founder and CEO Marina Tran Vu said, “Right now, we are slowly starting to see companies not think of sustainability as just a trend but a real market need. Previously, people just thought it was a trend like crypto, but sustainability is an environmental, social, cultural, and political issue that needs to be addressed for the long term. People are starting to see sustainability not a short-term goal – rather, it is a true investment in their business and people.”

Vu believes the biggest aspect driving green entrepreneurship is a hyper-awareness of individual impacts on the surroundings and the next generation, who are vocal about the things they care about – especially the future of the planet. “The fact there are only a few startups in this field show how difficult it is to be successful in sustainability, but also who is dedicated enough to work through the ups and downs of trends to make this a truly viable field to operate in,” she added.

Likewise, home-grown electric motorbike startup Dat Bike announced last month that it secured $8 million led by Singapore-based firm Jungle Ventures. With its fresh funds, it plans to expand its manufacturing capabilities, hire more people for its sales, support, research and development, and product teams, and create new tech and products.

“The quality of the air has been declining in Vietnam due to air pollution, primarily brought on by gas-powered automobiles,” said CEO Son Nguyen. “E-bikes are the most immediate and effective way to improve the air quality in Vietnam, and in other Southeast Asian nations too.”

Another startup, VECA, is offering a platform which allows users to call scrap collectors. The VECA app was released in 2020 to help create economic values from waste. So far, the startup has garnered approximately 32,000 users.

The company has recently partnered with Sweden’s Tetra Pak to expand used beverage cartons collection to 18 districts in Ho Chi Minh City. The inclusion of cartons in the collection list has helped VECA to increase the number of app users significantly. The startup hopes that the initiative to expand the carton collection network will encourage more collectors to use the app, thus reaching the goal of a zero-waste Vietnam, according to founder Bui The Bao.

Green entrepreneurship is also attracting the attention from venture capital funds. Gibs Song, general partner at VSV Capital, said that the fund has invested in over 80 startups since its inception in Vietnam in 2014.

“Because of the Vietnam’s emerging country nature, many of its startups actually are social enterprises. We are eyeing green trends and opportunities in Vietnam with an emphasis on transportation, renewable energy, and waste management,” Song said.

Besides investing in financial solutions, education, and healthcare, VSV Capital pays special attention to investment consideration in areas such as battery and solar cell recycling, solar cell cleaning robots, bioplastics, nano-cellulose fibre, reusable cups, and electric personal transportation.

According to EQUO’s Tran Vu, previously investments funds were not interested in sustainability startups unless they were really focused on sustainable tech or sustainable food. “Startups like ours weren’t as attractive because of the significantly lower margins or growth rates versus our tech-based counterparts,” she explained.

However, given the latest market corrections in the startup space, a focus on slower, sustainable growth with a path to profitability has driven interest in businesses like EQUO. “We are committing to changing the industry through great products and sustainable education,” Vu said.

The Just Energy Transition Partnership is a bold initiative by the International Partners Group, including the European Union, the United Kingdom, France, Germany, the United States, Italy, Canada, Japan, Norway and Denmark, to mobilise an initial $15.5 billion of public and private finance over the next three to five years to support Vietnam’s green transition.