AC Ventures backs sustainability in US$1.4 trillion economy
Published on April 22, 2023
In terms of environmental sustainability, Indonesia faces numerous challenges, many of which are linked to rapid economic growth and urbanization.
One of the most pressing issues is responsible waste management. According to the World Bank, Indonesia generates more than 64 million tons of waste annually, with less than half of it getting properly disposed of.
7.8 million tons of that amount is plastic, and 4.9 million tons of plastic waste is mismanaged (uncollected, disposed of in open dumpsites, leaked into the ocean from poorly managed landfills, etc). This has resulted in widespread environmental degradation and negative health impacts on society at large.
Another big challenge in the nation is food waste. The archipelago is one of the world’s largest food waste producers, with more than 300 kilograms of food waste generated per person per year. This has immense environmental and economic implications, as it contributes to greenhouse gas emissions and is a waste of valuable resources.
Overfishing is also a critical issue in Indonesia, with many fish stocks being overexploited due to unsustainable fishing practices. This threatens not only marine biodiversity but also has significant economic and social consequences for coastal communities that rely on fishing for their livelihoods. Indonesian waters are home to 37% of the world’s marine species, many of which are now endangered as a result. Shrimp, for example, are already overfished in more than two-thirds of Indonesia’s waters and becoming increasingly rare.
Indonesia also faces a significant environmental hurdle in the form of carbon emissions, with coal-fired power plants, transportation, and deforestation being the primary culprits. Despite the government’s commitment to eliminating coal usage, there is no concrete plan in place. In fact, the nation’s reliance on coal power is set to continue under the 2021-2030 National Electricity Plan, while the ban on coal exports has been lifted.
Sustainability as opportunity in a US$1.4 trillion economy
To address these sustainability challenges and more, Indonesia needs to adopt more sustainable practices and policies that support responsible waste management, reduce food waste, promote sustainable fishing practices, and decrease carbon emissions.
AC Ventures (ACV) is an early-stage venture capital firm backing innovative technology companies to solve pressing global challenges and improve lives. Its mission is to help entrepreneurs succeed by providing them with experience, network, and capital to build businesses that positively impact the environment.
Indonesia’s Chamber of Commerce and Industry recently established an ESG task force to set nationwide standards for sustainability, with ACV’s Head of ESG, Lauren Blasco, being tapped to join. The task force will work on a policy package for carbon measurement and mitigation toward net-zero emissions by 2060. Meanwhile, ACV’s recent impact report showed its firm and portfolio achieved a net impact ratio of +37%, outperforming that of the Nasdaq Small Cap Index at +29%.
With all this in mind and in recognition of Earth Day 2023, here are a few of the most environmentally sustainable startups from ACV’s portfolio.
Waste4Change is transforming Indonesia’s waste management paradigm
Waste4Change is an Indonesian waste management startup that manages over 8,000 tons of waste annually from more than 111 business clients and 3,450 households in 21 cities. The organization collects and recycles waste responsibly through its growing network of partnerships, including recycling agents, waste banks, and directly from clients’ locations.
The company’s initial focus was on separating inorganic waste, such as plastics, from organics and biodegradables. Waste4Change also provides a community-based implementation for municipalities, institutions, and tourism sites to encourage responsible waste management programs. The startup has partnered with the World Bank, established a research project on behavioral change, and founded a Waste Management Academy to raise public awareness about the importance of environmental protection.
Waste4Change has started programs to provide at-home composting supplies to households and deliver high-protein, organic feed for pets and farm animals. Despite these efforts, Indonesia generates 175,000 tons of waste per day, and Waste4Change’s founder, Sano, believes there is more work to be done. He aims to work with communities, municipalities, businesses, and tourism sites to help the government make good on its new environmental regulations, and he credits the media for bringing attention to the country’s waste problem. Waste4Change continues to play its role in pushing for behavior change and a cleaner, more sustainable future for Indonesia.
EdenFarm revolutionizes B2B food supply chains to eliminate food waste
EdenFarm, an Indonesian B2B food supply chain startup, is helping stakeholders in the country achieve near-zero food waste. This comes with the ancillary benefit of reducing the sector’s carbon footprint at large. Indonesia’s annual food waste contributes to over 7% of the country’s greenhouse gas emissions and is estimated to cost the economy between US$14.3 billion and US$37.1 billion per year.
EdenFarm runs an e-marketplace that allows farmers to sell directly to restaurants, shops, and grocery outlets of all shapes and sizes, effectively reducing the number of intermediaries in the supply chain. The company provides demand forecasts for farmers and helps them achieve production predictability. It also ensures that farmers can maximize sales on every yield via a deep and diverse buyer side that would not otherwise be available to them.
The startup has been building an integrated food distribution network since 2017, which has simplified the supply chain and increased margins by reducing prices. EdenFarm’s goal is to create consistent demand for farmers and micro-entrepreneurs, provided they follow the startup’s precise forecasts and instructions to avoid food wastage and reduce negative environmental impacts.
EdenFarm’s unique business model, born out of the founders’ farming days, solves the problem of food waste and may help address the issue of world hunger.
Aruna uses tech and data to fight overfishing and help coastal communities
Aruna, Indonesia’s largest integrated fisheries commerce platform, is tackling the issue of overfishing in the country by using technology and data to promote sustainable practices. In addition to serving as a digital supply chain aggregator for small-scale fishermen, cutting out traditional middlemen and offering fairer pricing while capturing a high margin, Aruna uses GPS trackers and technology to monitor fishing activities and advise coastal communities on which areas are being overfished so they can allow those areas to replenish themselves.
This approach has a direct impact on the long-term sustainability of each coastal community where Aruna is present. Aruna’s co-founders believe that profitability should be achieved through balancing the needs of both people and the planet, which is why the team is building infrastructure to support sustainable fishing practices. With over 60% of the Indonesian population living in coastal areas, fishing is a mainstay of the nation’s economy.
Xurya powers solar energy transformation for businesses affordably
Xurya is a solar energy startup providing sustainable and affordable solutions to Indonesian households and businesses. It aims to reduce the country’s dependence on fossil fuels and fight climate change.
The company offers solar panel installations for homes and businesses, battery storage systems, and energy-efficient appliances. Its solar panel systems generate electricity using photovoltaic tech, which is then stored in batteries for later use. This allows customers to have a reliable source of electricity even during power outages or periods of high demand.
In addition to energy, Xurya Indonesia also offers financing options to help customers afford the upfront costs of solar panel installations. It partners with banks and other financial institutions to offer low-interest loans and other options.
Xurya has already made a significant impact in Indonesia’s renewable energy sector. The company has installed over 3,000 solar panel systems and helped thousands of households and businesses to reduce their carbon footprint while lowering their energy costs.
Soul Parking alleviates traffic in megacities to lower carbon emissions
Soul Parking is a startup that provides compact motorcycle storage to tackle the shortage of parking in Indonesia’s urban areas. The team created an innovative elevated parking system that stacks bikes on top of each other to optimize storage space, which can also be customized to suit the conditions of each site.
Soul Parking has developed a proprietary operating system that digitizes existing parking facilities, incorporating a barrier gate system, barcode scanner, and web dashboard. It serves three types of clients: property and land developers, individual landowners with unused land, and government entities. The company offers a valet parking-like service and monetizes via a profit-sharing system with clients.
In addition to operating solar-powered parking systems, Soul Parking delivers sustainability by reducing carbon emissions via a more efficient parking process in Indonesia’s megacities. This creates a ripple effect that alleviates traffic and reduces drive time for everyone on a citywide scale.
