Venture Builder Terratai Receives IDR 31 Billion in Funding from UBS Optimus Foundation and Swiss Re Foundation

Lotus, venture builder which focuses on sectors impact, announced the initial funding of $2 million (around IDR 31 billion) from the UBS Optimus Foundation and the Swiss Re Foundation. Funds will be directed to launching the program cohort first in Indonesia, with the potential to expand to Southeast Asia in the future.

Terratai will create a program to build early-stage new businesses, which can demonstrate a measurable impact on nature and biodiversity, and deliver impact across a range of strictly defined metrics. These include: carbon mitigation and emission avoidance, biodiversity protection and species management, habitat protection and restoration, and enhancement of ecosystem services.

In an official statement, Terratai Founder & CEO Matt Leggett said that the partnership between Terratai and its two investors shows a joint commitment in reviewing how capital can be channeled for Nature-Based Solutions (nature-based solutions). As well as, an important step in closing the $800 billion global funding gap needed to protect and restore nature each year.

“This partnership with UBS Optimus and the Swiss Re Foundation now allows us to accelerate our mission to identify bold new business models that can protect Indonesia's most at-risk lands and seascapes, as well as provide the appropriate support and facilitation of the early-stage investment needed to bring "start-up companies are developing, and paving the way for economic activities that pay attention to nature conservation," said Leggett, Wednesday (22/11).

UBS Optimus Foundation CEO Maya Ziswiler added that Indonesia is at the forefront of the global fight against climate change. More than half of its landmass is covered by forests, and it is vital to conserve its natural resources with the help of nature-based solutions.

“Our new partnership with Terratai to protect biodiversity and decent livelihoods for the people of Indonesia, and over time in Southeast Asia, is a perfect example of how the UBS Optimus Foundation incubates impactful businesses, making them better prepared to accept investment and scale, while ensuring that they can still achieve positive results in the fight against climate change, biodiversity and local communities," he added.

Swiss Re Foundation Director Stefan Huber Fux said that Terratai's mission is in line with its commitment to building a more resilient world. “We are very passionate about scaling up nature-based solutions, which is a key focus in our strategic commitment to jointly build a dynamic ecosystem with investment opportunities for solutions that have a positive impact, not only on environmental challenges, but also open up economic opportunities for local communities ."

Recent research shows that the global food system – the way we grow, harvest, process and trade what we eat – relies heavily on nature. But the global food system is also the biggest cause of nature and biodiversity loss, and is responsible for more than 30% of global greenhouse gas emissions.

It is estimated that the population of Southeast Asia will increase to 770 million by 2040, placing further pressure on marine and terrestrial ecosystems for food production. Based on current conditions, this area could lose 70% of its natural habitat and 40% of its species, unless decisive action is taken.

Unfortunately, nature-based solutions are still underfunded. A report prepared by The Paulson Institute with the Nature Conservancy estimates that funding for ecosystem conservation and restoration is insufficient by $711 billion per year.

This widening gap cannot be overcome with philanthropic and donor funding alone. The only sustainable way to finance nature-based solutions is to mobilize more capital from private investors.

Terratai Program

Quoting from the site Swiss Re Foundation, Terratai will identify, create and develop early-stage nature-based companies that address systemic challenges causing the loss of nature and biodiversity in Asia.

The Terratai team provides resources, expertise and tailored investments to drive the growth of these companies until they can achieve scale and attract institutional capital, typically over a period of at least two years.

Terratai invests in businesses through direct financing instruments, such as loans, equity, and profit sharing and/or through “sweat equity” and offers access to business development and service delivery models, tailored to the specific needs of each business.

With a focus on Southeast Asia, Terratai is designed to build dynamic investment opportunities, demonstrating the viability of nature-based business models and their positive impact on environmental challenges. The approach taken reflects the urgency of the environmental and climate crisis, as well as the need for patience in developing the complex solutions needed to address it.