How East Ventures is investing in a more sustainable and inclusive future

In a world where climate change is devastating lives and livelihoods, food insecurity is still rampant, and inequality persists. It’s becoming increasingly important for businesses to become sustainable and do more than just make money.

Unsurprisingly, environmental, social, and governance (ESG) initiatives are coming to the fore in the startup world, and VC firms are taking notice – as they should. After all, VCs play a key role in driving the future of people, society, and the planet. As is the case, it’s crucial for VCs to have ESG considerations in mind right from the start.

“Climate change and social inequality are pressing issues,” says Avina Sugiarto, partner at Indonesia-based VC firm East Ventures. She adds that creating a positive impact has always been a point of emphasis for the firm. “Sustainability is no longer merely corporate social responsibility or a philanthropic effort; it has evolved to be a necessity and opportunity for many businesses.”

Laying the foundations

Sugiarto points to the firm’s early investments in companies like ecommerce major Tokopedia and edtech firm Ruangguru as examples of its commitment to action.

Avina Sugiarto, partner at East Ventures / Photo credit: East Ventures

While Tokopedia helps MSMEs across Indonesia expand their market reach, Ruangguru makes quality education accessible, she says. “Enablement of economic growth, prosperity, and inclusivity is evident in many of our investee companies’ business models to provide better access, more affordable products, and services via technology.”

According to Sugiarto, East Ventures operates on a “2P investment hypothesis,” where the firm looks at the people behind a company as well as the potential market it can address with its solutions. The focus is on ensuring that strong founders are at the helm of a startup that has the ability to tackle meaningful problems. This helps East Ventures back startups that can make the most impact.

Putting money where it matters

Utilizing these principles, East Ventures has invested in several companies – such as Xurya and TreeDots – that have a strong ESG focus.

Based in Indonesia, Xurya is a renewable energy startup focused on enabling businesses to lease solar power solutions, while Singapore-headquartered TreeDots aims to reduce food loss by creating a platform to sell surplus and imperfect food supplies.

According to Sugiarto, both firms meet East Ventures’ 2P criteria and address major environmental and societal issues.

The Indonesian government’s aim to boost the nation’s use of solar power over the next decade presents Xurya with a significant opportunity.

Eka Himawan, managing director at Xurya / Photo credit: Xurya

“We saw acceleration in market growth in nearby markets such as Vietnam and India once government plans [for renewable energy] were set in motion,” shares Sugiarto. Based on this, East Ventures believes that “rooftop solar panels have the potential to grow more than 15x by 2030, and Xurya is well-positioned to ride the market growth as a top player.”

The founders of Xurya also have experience in the alternative energy space, giving the firm the right foundations and knowledge to take its solutions to market.

Meanwhile, East Ventures was drawn to TreeDots’ potential to address issues with Southeast Asia’s fragmented food supply chain, notes Sugiarto.

“[This fragmentation] presents a large opportunity for TreeDots to help digitalize and provide the operating system for various stakeholders to conduct their business on,” she says.

The co-founders of TreeDots / Photo credit: TreeDots

TreeDots’ platform, with its logistics offerings, streamlines the process of selling and buying surplus or imperfect food and assists stakeholders in reducing food loss more effectively.

East Ventures’ investments have played a pivotal role in supporting the development of the two startups.

“Back when we first started out [in 2018], ESG was nowhere on any investor’s list of priorities,” says Eka Himawan, managing director at Xurya. “East Ventures’ early investment provided confidence to other investors and enabled us to take Xurya off the paper and into the real world.”

The VC firm also offers non-monetary support to its portfolio startups. East Ventures helped TreeDots move into Indonesia, where 23 to 48 million metric tons of food is thrown away yearly.

TreeDots’ co-founder Tylor Jong said that the VC firm has played a critical role in the company’s regional expansion, particularly in Indonesia, and helped the B2B platform overcome many nuances unique to the Indonesian market. “It also facilitates collaborations between its portfolio companies and provides support as we evolve our organizational structure along with the company’s growth.”

Committing to a better future

While supporting ESG startups is core to East Ventures’ investment approach, it is also driving greater equality and sustainability in the region.

Earlier this year, the company released its inaugural Sustainability Report that outlined the key ESG frameworks and initiatives from the firm and its partners.

East Ventures, which is a major sponsor of Tech in Asia’s Environmental Disclosure Pulse Check, also releases its Digital Competitive Index annually, which maps the digital inclusiveness of 34 provinces in Indonesia and helps the country support economic growth by encouraging technology access and literacy.

The firm also runs a “Women with Impact” program and fosters discussions for an inclusive working environment. Its other events are centered around sustainability and equality such as its Earth Day panel discussions.

In the future, East Ventures hopes to lead the charge toward greater integration of ESG practices and drive positive impact across its portfolio by backing firms that do well and do good.

“We take an active role to promote a more sustainable and inclusive future,” concludes Sugiarto. “We will continue to do so as we grow and strengthen our capacity and capability, leveraging technology and digitalization to scale up our impact.”

East Ventures is a pioneering, sector-agnostic venture capital firm in Indonesia. It is partnering with Tech in Asia to host this year’s Startup Arena Pitch Battle in search for the next big environmental, social, and governance startup at the 2022 Tech in Asia Conference.

Sign up for the Startup Arena Pitch Battle here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.