1. Startups

Google Announces "Impact Startup" Special Managed Fund in Asia Pacific, Indonesia Enters Radar

Gringgo is one of the local startups that received a grant from a similar managed fund in 2019 from Google.org

Google, through the nonprofit arm of Google.org, announced a new managed fund "Sustainability Seed Fund" focused on grant funding for startups impact in the Asia Pacific region. Fund It has $6 million in funds under management (over 86 billion Rupiah), will target startups that are serious about impactful sectors, such as air pollution, biodiversity, renewable energy, waste and the circular economy.

A non-profit organization in Indonesia is one of the countries included in Google's radar to receive the grant funding, although there is no mention of the allocation of funds prepared by Google.

To DailySocial.id, Google.org APAC Lead Marija Ralic said, the Asia Pacific region is very vulnerable to climate change, therefore it continues to look for ways to advancing sustainability and empowering others to do the same.

“Through the Google.org Sustainability Seed Fund, we hope to support innovative nonprofits through grant funding and resources, to scale up promising technologies and address the region's most pressing sustainability challenges.”

He continued, Google.org has seen many innovative organizations and nonprofits across Asia. One of them, Indonesia uses technology to tackle climate change. An example is the Gringgo Foundation, which has previously been supported through Google.org.

As a note, Gringgo gets a grant from Google.org for $500 in 2019 after being named one of the 20 participants in the Google AI Impact Challenge. Gringgo is a foundation founded in 2017 by Febriadi Pratama. This foundation adopts technology to help overcome the waste problem in Indonesia, especially Bali by using AI.

Ralic continued, previously his party conveyed at the COP26 global climate conference last year, that in terms of sustainability, the private sector, government and society have a responsibility to work together, establish new partnerships, and act now. “For this reason, we are providing the $6 million Google.org Sustainability Seed Fund in Asia Pacific.”

The funds will be used to assist local nonprofits across the region to develop promising technologies, address challenges such as air quality, water conservation, and improve access to renewable energy in Asia Pacific and beyond.

Through this fund, Google.org will not only support nonprofits and organizations with financial support and in-kind support such as free advertising credits, but also technology and ideas, to address some of the most pressing sustainability challenges in the region.

"We look forward to sharing more details about the fund and how nonprofits can apply in the coming weeks."

Impact investing vs philanthropy

Managing Director of Angel Investor Network Indonesia (ANGIN) David Soukhasing explained, the basic similarities between philanthropy and impact investment is that both of them have “impact intent” (impact intention)” and “impact measurement”. However, we can distinguish them based on two factors, namely priorities and expectations of financial returns.

Philanthropy clearly has social and environmental objectives, placing investments made as grants so that they do not expect returns. Unlike philanthropy, impact investors prioritize impact and profit. Thus, impactful investors expect financial gains. However, there are investors who adopt a second approach called venture philanthropy.

This hybrid approach takes the best of both sides. The benefits are the creation of social impact and the expectation of financial returns. Impact investors assess opportunities in a different way than philanthropists. “It is important to note that not every impact (which is often discussed by philanthropists) is always suitable for impact investing and vice versa,” said Soukhasing.

Although the number of startups that use a green or environmental, social, and governance (ESG) approach is still limited, according to , currently there is a positive trend of business presence having an impact on the ecosystem. Impact investment has also emerged, as also discussed in the report DSInnovate tentang agritech in Indonesia.

The majority of them are here to support entrepreneurship, providing more specific support for certain groups of social entrepreneurs, for example energy-focused accelerator programs, accelerator-focused waste management programs, or entrepreneurial support focused on specific geographic areas.

For Soukhasing, this factor is able to measure Indonesia's readiness for impact investment. Indonesia needs a comprehensive ecosystem to be ready to welcome impactful investors. Not only capital, basically a strong pipeline is needed from the company/startup.

“One measure of maturity is the overall value of capital diversity, diversity of investors, different stages, different types of money, and all supporting functions. In terms of supporting functions, such as incubators, accelerators, co-working spaces, Indonesia is actually quite developed. There are quite a lot of pipelines and investors are here.”

More Coverage:

According to the ANGIN report entitled Investing in Impact in Indonesia, in 2013 the concept of impact investment was still very rare in Indonesia. But now it is more familiar because there are VCs that start to create special funds for investment in impactful sectors.

There are a number of impactful investors who have invested in Indonesia, both local and foreign players. Some already have a representative team in Indonesia. The total reached 66 investors, with details of 61 of fund abroad and the remaining five from Indonesia.

Meanwhile, the number of mainstream investors who have disbursed a number of funds for the impact sector is far greater, almost twice as many as 107 investors. With details of 32 local investors and 75 investors from abroad.

The focus of each impact investor is also different. ANGIN noted that thematically, there are 10 types of impactful businesses that are their respective focus, divided into financial inclusion, forestry, clean energy, poverty, gender lens, circular economy, fisheries, climate, agriculture, and media. Each of these themes reflects the opportunities and challenges in Indonesia.

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