In early March, Vietcetera wrote about how eco-friendly startups could be the next major trend for venture capital in Vietnam. The fact that four Vietnamese Greentech startups (Wiibike, IoTeamVN, Hachi, and PLASTIC People Company) showcased their eco-solutions at the AsiaBerlin Summit in late 2021 offers encouragement that this trend is beginning to take shape. So too do the words of early-stage startup investment fund ITI’s Managing Director Ngo Dinh Dat, who told Vietnam Investment Review, “The prominent startup trend is centered on business projects that contribute to community development and sustainability such as clean energy consumption, and jobs for the disadvantaged.”
Though Dat doesn’t explicitly say that VC funds are actively looking for eco-conscious and sustainability-focused startups to invest in, the emergence of so many startups in the field does suggest that it’s highly likely in the near future.
The time is ripe for such a shift too, in light of the UN’s recent report which surmises that Asia Pacific’s 2030 Sustainable Development goals are well out of reach, and could even take until 2065 to reach the current rate. While the region has made progress in tackling poverty, inequality, health, and wellbeing, there may actually be a regression on the climate front since tracking began in 2016 – a worrying sign for one of the world’s most vulnerable areas. On the release of the report, UN Undersecretary-General Armida Salsiah Alisjahbana has called for all stakeholders to, “Redouble efforts to fully implement the 2030 Agenda for Sustainable Development.”
The Intersection of Venture Capital And Climate Activism
One newly created venture capital fund that’s focusing purely on tech startups that bring digital solutions to climate challenges is Earth Venture Fund (EVC).
Vietcetera reported recently that EVC had announced the closure of its first fund and began its first investment period. Through its VC fund as well as its Earth Venture Studio initiative, EVC is leveraging a team of seasoned investors and tech entrepreneurs to bring financial backing and strategic support to early-stage startups (pre-seed to Series A) with tech-driven, but more importantly, scalable business models for tackling climate change.
The focus on scalability is a crucial one. While the efforts of small-scale disruptors are commendable, a wider cultural, industrial and economical shift is what will make the long-term difference. The key to bringing this to fruition will be a major investment, and the potential for financial gain – turning eco-friendly ventures into avenues of profit.
Beyond automotive, there’s also been an uptick in Internet of Things (IoT) companies working across multiple niches like urban energy efficiency and agritech, like the aforementioned IoTeamVN and Hachi.
The Potential For Environmental Blockchain and Green Gamification in Vietnam
As well focusing on ICT and AI & Machine Learning solutions, EVC’s website name-checks two very interesting areas of interest for investment – Blockchain, and Gamification for the environment.
Blockchain’s impact on the environment has been a topic of hot debate in the last few years, however, its potential for good in the battle against the climate crisis is becoming an increasingly popular idea – even being written about at length by the United Nations Development Program in January this year.
Vietnam is emerging as a Blockchain leader both regionally and globally and with a new US$100 million fund from AEX aiming to boost Blockchain development further, it’ll be very interesting to see if any DeFi startups focused on sustainability come to the fore in the near future.
As for Gamification, this could well be the area in which Vietnam can make the greatest impact on environmental challenges. Essentially, gamification applies the use of game mechanics to increase incentivization, and thus user engagement. The global gamification market has more than doubled in value in the last five years to almost US$12 billion, and in the Asia Pacific, it’s forecast to keep on growing at an extraordinary 27% every year.
FinTech app MoMo, one of the Vietnamese startup ecosystems' greatest success stories recently hit a US$2 billion valuation, is at the coalface of the gamification trend, with game-based in-app offerings like MoMo Academy, MoMo City, and MoMo jumps all dramatically increasing customer engagement. So too is the on-demand e-commerce platform Loship, which includes gamified features such as quest hunts on its app. It’s not difficult to see that gamification, already in vogue in Vietnam, could potentially be used to incentivize climate action on a grassroots level in Vietnam.
With investors like EVC and others wishing to monetize green practices, startups trending towards sustainability, and the burgeoning tech industry making waves in gamification and blockchain, the major pieces are in place for a tidal movement.