Market Insights: 2023 Learnings from Radical

It is mid-January already, so in preparation for investing into more founders in 2024, we thought it would be helpful to share some of the #trends we have observed in the #ClimateTech space across #SoutheastAsia:

🌳 The Nature-based solution (#NBS) sector is still growing in Southeast Asia, with increasing awareness about reforestation and conservation among consumers and policy makers.
➡️ Venture success comes from product differentiation, high data quality and integrity, and scalability across large terrestrial and mangrove areas.
➡️ Founder-market fit is critical: entrepreneurs need to bring the right level of experience and skills to engage multiple stakeholders and navigate the intricate complexities of regulations surrounding landownership and greenwashing optics.

☀️ Financing #solar photovoltaics (PV) and infrastructure could be an attractive commercial entry pathway into the energy market.
➡️ The race is on to build charging infrastructures, especially in Singapore, but the utilization rates are yet to be filled and consumer experience under-optimized.
➡️ Battery swapping and energy storage are high-stake businesses, demanding significant capital outlay due to ownership and financing.

🚗 #CleanTransportation and #Mobility offers a significant opportunity as the sector is broken in most Southeast Asian cities (think traffic congestion).
➡️ However, the general OEM play is challenging, with a lot of competition hence the need to differentiate.
➡️ Potential intensive competition from well-capitalized foreign players, which are much further ahead in the engineering curve, is a threat.
Yet, services like fintech, electrification, fleet management and other ecosystem plays emerge as promising sub-sectors.

🌾 #Food, #Water, and #Agriculture sector, Vertical Farming shows exciting prospects, but the economics are challenging and often less appealing than other sectors.
➡️ Alternative protein startups are growing, but they must offer more than a great consumer ‘green’ brand to counter traditional meat brands.
➡️ In Agritech, there is an increasing number of ventures, leveraging the model and riding on the success of eFishery (venture in Indonesia).

♻️ In #WasteManagement & #Circularity, fast fashion is prominent, but companies are in need of a viable commercial models, as they tackle the high CAC and distribution costs.
➡️ Consumers also struggle with the stigma of donating and buying used clothing (although this is changing with the younger demographics).
➡️ Excess food waste faces similar issues but because of the time limitations - it makes distribution costs even higher.

As we leap into 2024, we look forward to another (better!) year of innovation and growth in Climate Tech across Southeast Asia.

Article originally published on LinkedIn.