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Investing in a Sustainable Future

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As we head into the last quarter of 2019, all eyes are set on what the next year of investments will look like. 

The last 4 to 5 years saw multiple Venture Capital (VC) firms, both local and international, set up their regional hubs here in Singapore with the objective of raising and deploying their first and second funds.

Investments showed a clear focus on consumers, starting with e-commerce (Lazada/Carousell/Redmart) and then subsequently shifting into mobility (Uber/Grab/Neuron/Beam) and financial inclusion (Validus/InstaRem/CredoLab).

If portfolios are observed from an external lens while looking at the types of investments described above, a subtle overarching trend seems to shine through for the companies being invested in - accessibility and convenience.

With the bulk of the funds deployed from their first and second funds - the last quarter of this year will see several of the VC firms raise their third and fourth funds and start deploying soon.

The question is, with consumers being well taken care of, where do we see investments headed? One trend rings true louder than the rest - sustainability. 

Sustainability in their current investments will have firms putting additional investments into current portfolio companies that are performing in line with their expectations, and communicating well, driving good synergies.

For new investments, we see VC firms starting to invest in deep-tech, with a broader view of looking at technologies that look at global sustainability and Impact Investing. This will likely be in the form of focused, and more consistent investments across healthcare, bio-tech, agri-tech, food-tech, and AI.

This also means investments will branch more and more out of Singapore and into the growing emerging markets such as Vietnam, Thailand, and Indonesia.

If this direction holds true, and the VC firms do deploy funds across businesses focused on global sustainability – the impact the VC firms in the region can have over the next 2 years is going to be something to look forward to.