Since Accelerating Asia’s first investments in 2020, we have made it a priority to invest in fast growing startups. Within that broad investment mandate, we also give consideration to those that make an impact as measured through the United Nations Sustainable Development Goals (SDGs) of the United Nations.
To date, 100% of the startups in our portfolio target at least one SDG, which we do our best to document. Here is an example from our portfolio page from DeafTawk.
The goal of promoting our SDGs is simple: We want to attract like-minded investors, who also wish to invest in profit with purpose. These investors can collaborate with Accelerating Asia by co-investing in a particular startup or even investing into a particular fund.
Here we drill into some of the data around the portfolio's contribution to SDGs. We find this collective impact is one of the reasons fund investors, our limited partners, also come to us, in addition to the rapid growth they see in the individual ventures.
Accelerating Asia has invested into 50 startups, and on average each company targets 2.56 SDGs. This average is not dramatically skewed by one or two outliers, either: A full 40 of our startups target 2 or more SDGs. Since the tech ecosystem can often be obsessed with growth at the expense of other metrics like social impact, we believe this figure is promising, though of course it can still be improved.
The startups with the most breadth are RecyGlo, which addresses 6 SDGs, and Beam and Go, iFarmer, and Mayani, which each address 5. Since aligning startups with SDGs has recently become in vogue, many organizations ostensibly tackle a SDG, but the connection is tenuous at best.
Such does not occur at Accelerating Asia for two reasons. One, as part of our rigorous selection process, we also aim to find founders who have as much integrity as they do passion for their vertical. Two, each reported SDG is measured by a relevant company metric, so we can ensure that the connection is accurate, substantial, and quantifiable.
Let’s take the case of iFarmer. It addresses SDG 1 No poverty, 5 Gender Equality, 8 Decent work and economic growth and 15 Life on Land. SDG 1 and 8 are evident in the fact that iFarmer has lent over US$17 million dollars to over 74,000 registered farmers, who have in turn used that capital to grow their farms and harvest 85,000 tons of produce, a metric for SDG 15. During the accelerator program, we work with founders to hone this deep alignment between their startup metrics and the SDGs they target.
Some of our most commonly targeted SDGs are SDG 8 with 25 companies, SDG 3 (Good health and well-being) with 10 companies, and SDG 9 (Industry, innovation, and infrastructure), 10 (Reduced inequalities), and 11 (Sustainable cities and communities), each with 8 companies.
The most commonly targeted SDG is SDG5. This universality of SDG5 is due to the fact that startups are attacking it from many different ways. Some are providing it through economic opportunities: Over 35% of our entrepreneurs are female, and leadership across the group strives to employ women across every level of their organizations. Others are doing it through the products themselves: A full 65% of our portfolio are gender-lens investments.
This breadth is a positive start. When it comes to making a social impact as a tech startup, there is no such thing as a zero-sum game. In fact, many of our startups operating in the same region and even targeting the same SDG are doing so in wholly different ways. As an example, let’s examine the companies that target SDG 8 in Southeast Asia.
In the Philippines, Beam and Go is improving decent work and economic growth through its marketplace, which enables overseas foreign workers to purchase necessary goods and services directly for their loved ones back home. In Indonesia, Karyakarsa enables content creators to better monetize directly from their fans and communities.
Ostensibly, these companies all target SDG 8, all in Southeast Asia, but they do so in wildly different ways. Each startup contributes to the SDG by improving decent work and economic growth for its own particular target market, whether its overseas foreign workers, content creators, or food-and-beverage establishments. The same principle applies to SDG 3, 5, 9, 10, 11, and the others with multiple companies: Each of our startups is driving them forward through
their unique products and services, all for the betterment of different stakeholders. When it comes to the social good, the saying is true: You can never have too much of a good thing.
There are two categories where we can do better: one, where Accelerating Asia has no presence at all; two, where Accelerating Asia has presence, but where we still stand to dramatically improve.
Let’s begin with the first one, as it’s easier to improve from zero. The two SDGs where we have no coverage at all are SDG 6 (Clean water and sanitation) and SDG 16 (Peace, justice, and strong institutions). At first glance, these two SDGs would seem not to lend themselves too well to innovation. Clean water and sanitation, for example, would seem to be the provenance of large, industrial-scale utilities, not small startups. In actuality, there are many startups targeting various parts of the water or sanitation life cycle around the world. In Africa, for example, some startups are devising solutions to more efficiently filter water in remote locations where pipes cannot or have not yet reached. There are similarly many other startups in Asia Pacific working on solutions in water or sanitation. We would like to take this opportunity to invite these organizations to collaborate with Accelerating Asia. This space is capital-intensive, so the innovators in this space need all the backing they can get to achieve early, investor-attractive traction.
SDG 16 would seem even harder to target than SDG 6, as you cannot build hardware to address “peace, justice, and strong institutions.” While there is no direct solution for this SDG, you can create solutions, specifically in software, that help facilitate this. For example, one key to achieving this SDG is minimizing corruption. There are many blockchain solutions around the world that aim to improve transparency, and in turn, minimize corruption, across a variety of fields, including everything from voting and procurement to charity and logistics. There are likewise other ways to facilitate this SDG, and we would also like to invite them into Accelerating Asia. This SDG is arguably a foundational goal: Through strong institutions, it’ll be easier to achieve the other SDGs.
We have five SDGs where we have only one or two companies targeting them. These are SDG 2 (Zero hunger), 7 (Affordable and clean energy), 13 (Climate action), 14 (Life below water), 15 (Life on land), and 17 (Partnerships for the goal). Like the SDGs for which we have no companies, we would like to have more portfolio companies here.
To reach 100% coverage of our SDGs and have significant depth in each one, Accelerating Asia will need a two-pronged approach. One, we will need ambitious founders in Asia Pacific who have solutions that address our SDG gap.
Two, we will need investors who care as much about the social good as Accelerating Asia. They can invest in a particular startup if they are drawn to its particular causes and solutions. Or they can invest into our latest fund, affecting change through the support of a range of impact-oriented startups. We will never be perfect, but as we hope the above exercise shows: You may be hard-pressed to find co-investors who care as much about impact as innovation in Asia Pacific.
Accelerating Asia invests in startups with scalable technology solutions and revenue generating business models that combine purpose with profit.
In making an investment decision, investors must rely on their own examination of startups and the terms of the investment including the merits and risks involved. Prospective investors should not construe this content as legal, tax, investment, financial or accounting advice.