Climate tech startups are creating a buzz in the Southeast Asia region thanks to a trend towards sustainable development.
According to data compiled by Dealstreetasia, private funding dedicated to climate technology startups in Southeast Asia hit $1.11 billion in the first 11 months of 2022. This impressive figure illustrated a considerable increase in international investors’ appetite for these green, sustainable startups.
A report titled "The state of climate tech in Southeast Asia 2022” showed this is the first time climate tech startups – defined as those focusing on decreasing greenhouse gas emissions or addressing the effects of climate change – have raised more than $1 billion in a single year. In contrast, the total capital raised by climate technology firms in 2021 was $607 million.
Since 2012, Vietnam-based climate tech startups account for a 5.3 per cent share of climate tech funding value in the whole Southeast Asian industry, which places the country in the top three countries. Singapore ranks first (80.4 per cent), followed by Indonesia (13.1 per cent).
The renewable energy sector of climate technology startups has received the largest investment, with total funding rising to over $200 million yearly as of 2019.
Among the eleven categories examined in the paper, renewable energy received the most financing (at 41.5 per cent of the total) between 2012 and the present.
“Renewable energy sources such as solar and wind have reached a cost lower than traditional fossil fuels – without the need for government subsidies,” said ABC Impact chief investment officer Than Shao Ming.
On the other hand, Dealstreetasia also noted that startups focusing on deep technologies, such as innovative industrial products with knock-on effects, were contributing to global efforts to decarbonise.
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By Celine Luu