East Ventures grows AUM to $1.5b as ESG takes priority for investments

East Ventures partner Avina Sugiarto / Photo credit: East Ventures

Indonesia-based VC firm East Ventures is putting ESG and sustainability at the forefront of its investments, following a two-pronged approach of “doing good and avoiding harm.”

“We follow a strict exclusion list for investments based on global standards, such as the International Finance Corporation and European Development Finance Institutions exclusion lists,” Avina Sugiarto, partner at East Ventures, told Tech in Asia.

She added that the company has also set up a dedicated ESG team to work with its portfolio firms for risk and impact management.

While implementing this more rigid approach, East Ventures said it reached US$1.5 billion in assets under management in 2022, an over 50% year-on-year increase. The VC firm supported over 500 founders through 105 new investments last year.

“As a leading sustainable investor with portfolios that have the potential to transform markets worth over US$52 billion, we see ourselves as catalysts for change,” said Willson Cuaca, co-founder and managing partner at East Ventures.

For example, Sociolla – an Indonesian omnichannel beauty platform in the VC firm’s portfolio – prioritizes original products, eco-friendly packaging, and waste reduction. Meanwhile, Komunal – a fintech startup and another one of East Ventures’ investments – connects MSMEs with funders, fostering economic growth and supporting financial inclusion.

In the report, East Ventures said it has more than 300 portfolio firms – including Tech in Asia – operating across 30 countries.

“Post-investment, we work to measure the impacts across our entire portfolio as well as its ecosystems, including measuring non-financial ESG metrics that drive long-term value creation, such as employment generated, diversity across the organization, and alignment to the UN’s Sustainable Development Goals,” Sugiarto shared.

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East Ventures said it also supports companies that develop solutions focused on cleantech, renewable energy, circular economy, and sustainable agriculture. Some of its previous investments in these areas include Renew Energy, Xurya, and Sociolla, among others.

According to a recent report by Bain and Company, green investments in Southeast Asia have been in a lull, with total amounts falling 7% year on year to US$5.2 billion in 2022.