The Asian Development Bank (ADB), has established the ADB Ventures platform to feed investment and support to Asian startups which are developing solutions aimed at achieving the UN Sustainable Development Goals (SDGs).
The fund is accepting contributions from a range of partners to meet its $50 million target size, with the Nordic Development Fund, Climate Investment Funds, and the Government of Australia providing capital for the project’s preparation.
Operations are expected to begin in Q2 2020 with investment in early stage startups focused on addressing ESG issues such as climate change and the empowerment of women. ADB Ventures has a 17-year fund life, which means it can invest long-term capital into the projects selected.
Mike Barrow, director general for private sector operations, ADB, says: “This region is brimming with technology solutions to conserve energy, reduce waste, fight climate change, and deliver public services effectively.
“Our vision is for ADB Ventures to become the region’s largest impact technology platform, crowding in more than $1 billion of risk capital to achieve the SDGs by 2030.”
Impact technology solutions refer to specially designed technologies which are fundamentally aimed at making a positive impact toward ESG factors.
Barrow continues: “ADB Ventures will help bring these solutions to market by leveraging our extensive operational networks and filling the risk capital gap facing innovative early-stage companies in developing Asia and the Pacific, particularly smaller and frontier markets.”
ADB differentiates itself from a typical VC fund by going beyond the sourcing and provision of capital. ADB Ventures Investment Fund 1 (the facility’s anchor trust fund) is augmented by a $12 million technical assistance program that will be deployed to the startups over three years. The program is two-pronged, with the ADB Ventures SEED grant program promoting expansion into emerging markets and the validation and de-risking of technology pilots.
The second leg of the assistance program, ADB Venture Lab provides a suite of innovation programs and will generate technology pilot opportunities to the anchor fund’s portfolio companies.
The announcement echoes a recent wave of banks and other large institutions making significant pledges to allocate resources toward sustainable ventures and re-align their portfolios to meet self-imposed carbon neutral commitments.
Goldman Sachs, Citigroup, BlackRock and JP Morgan are just a handful of industry leaders working toward these goals, some of which are also deploying impact investing funds to support environmentally focused fintechs.