The United States International Development Finance Corporation (DFC) has committed to investing $15 million in Wavemaker Impact, a climate-tech venture capital fund based in Singapore that covers Southeast Asia.

Wavemaker Impact said in a statement on Thursday that the investment is a significant step towards the DFC’s climate objectives in the region.

According to the statement, the amount forms part of Wavemaker Impact’s ongoing fundraising efforts for its inaugural fund, which is anticipated to be oversubscribed by the end of this year.

“We are delighted to welcome the DFC as a limited partner to Wavemaker Impact to help us catalyze more investments in the region,

“We see strong alignment with the DFC’s focus on agriculture, food, and land use, which account for approximately half of Southeast Asia’s emissions, as well as decentralized infrastructure,” said Quentin Vaquette, Founding Partner at Wavemaker Impact.

Launched in October 2021, Wavemaker Impact is the first venture capital-backed climate tech venture builder in Southeast Asia.

The team co-founds sustainability startups with experienced entrepreneurs, aiming to reduce 10% of the global carbon budget by 2035.

Each company created by Wavemaker Impact is a ‘100×100’ company, with the potential to abate 100 million metric tons of carbon and achieve $100 million revenue.

The founding team has previously built over 15 companies (including unicorns and an initial public offering [IPO]) from scratch and invested over $300 million in Asian tech companies, including 35 greentech startups.

It is noted Wavemaker Impact has forged strategic partnerships with prominent organizations, including the Singapore government’s Enterprise Singapore and EDB New Ventures, as well as the United Nations Development Program.

The firm also launched an agri-tech joint venture with Bill Gates’ Breakthrough Energy Ventures, GenZero, and Singapore state investor Temasek.

To date, the firm has launched six companies in areas such as biochar for carbon sequestration, residential solar penetration through mortgage integration, regenerative agriculture, degraded land restoration, food waste, and sustainable fuels.

With the new investment, the firm aims to expand its portfolio to ten companies by the end of this year, and 16 companies by next year.

The DFC’s investment in Wavemaker Impact signifies its commitment to reducing emissions in Southeast Asia.

It has chosen Wavemaker Impact as its first climate-focused fund investment in Southeast Asia because of its unique approach to climate-tech investment and deep expertise and capabilities in identifying scalable climate solutions and finding strong local talent.

“DFC is proud to support Wavemaker Impact in catalyzing investment for innovative climate solutions in Southeast Asia,

“This transaction demonstrates DFC’s commitment to providing impactful financial support for innovative, sustainable, values-based enterprises promoting scalable climate solutions,” said Mateo Goldman, Acting Vice President of DFC’s Office of
Equity and Investment Funds.

As the global climate crisis intensifies, Southeast Asia faces greater vulnerability, especially to rising sea levels. Studies indicate that over 100 million people, or 15 percent of the region’s population, inhabit areas that are expected to be underwater by 2050.

However, Southeast also boasts some of the world’s largest natural habitats and carbon sinks, such as expansive rainforests in Papua and Borneo, significant peatland deposits in Indonesia, and some of the world’s largest mangrove reserves.

Given that 50 percent of the region’s emissions originate from food production and land-use changes, and the region is primarily characterized by smallholder agriculture (individual farmers operating plots of only a few acres), localized solutions are crucial.

“While technical solutions to reduce emissions economically exist, customer-centric businesses are still lacking,

“We believe that entrepreneurs hold the key to creating commercially viable and customer-oriented companies that can scale to serve millions of users and achieve rapid reductions in emissions,” Vaquette said.

The DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today.

It invests across sectors including energy, healthcare, infrastructure, agriculture, and small business and financial services.

Wavemaker Impact, Breakthrough Energy Ventures, GenZero, and Temasek launch new agri-tech startup Rize