Wavemaker Impact and Thesis 100x100, Formulation to Accelerate the Birth of Impactful Startups

The escalating global climate crisis means Southeast Asia faces greater vulnerability, especially to rising sea levels. Studies show that more than 100 million people, or 15% of the region's population, inhabit areas that are expected to be underwater by 2050.

On the other hand, the region also offers some of the world's largest natural habitats and carbon sinks, such as extensive rainforests in Papua and Kalimantan, significant peatland deposits in Indonesia, and some of the world's largest mangrove reserves.

As much as 50% of the region's emissions come from food production and land use change, particularly characterized by smallholder agriculture, therefore local solutions are essential. This spirit is what we want to continue Wavemaker Impact, part of Southeast Asian VC Wavemaker Partners, which was founded in 2021.

DailySocial.id had the opportunity to chat further with Wavemaker Impact Founding Partner Marie Cheong in writing.

Thesis 100x100

Cheong said Wavemaker Impact (WMi) is part of Wavemaker Partners' strategy which is transitioning from single strategy to multi-strategy managed funds. WMi focuses on climate technology and venture development which it claims has attracted a wide range of LPs and impact managed funds have a different investment process and structure to the managed funds at Wavemaker Partners.

"These two strategies contribute to Wavemaker's vision to be the most trusted early-stage VC in Southeast Asia and its mission to invest in the best entrepreneurs in the region, and lead a trusted community to help them succeed and have a positive impact on the world," he said.

He continued, WMi's mission is to build a portfolio of climate technology companies that can reduce 10% of the global carbon budget. For this reason, it partners with experienced entrepreneurs to create concepts and invest in 100x100 companies – a scalable company with the ability to reduce 100 million tons of carbon dioxide equivalent and generate a business with revenues of $100 million.

He and his team focus on business model innovation – developing incentives that encourage the adoption of commercially available green technologies or change behavior. Every business that is built is mandated to increase revenue or reduce costs for customers through environmentally friendly technology.

“Because we don't focus on technology risk, these companies have the ability to achieve scale within a typical 10-year VC funding timeline. Thus, we are targeting 3-5x returns for our LPs,” said Cheong.

The process carried out by WMi, as a venture builder, begins by looking for experienced entrepreneurs who are driven to solve big problems urgently and launch impactful new businesses. Every founder in the WMi portfolio has a previously proven track record of successful exits. Intended to demonstrate that they know how to create value, build teams, develop products, build customer networks, and raise capital.

Once the person has demonstrated a commitment to working together, WMi will provide a team of three venture builders to work with the founder for three to six months to find a 100x100 opportunity that matches their ambitions and skills.

Guidelines have also been developed, starting with finding founder-problem fit: a problem space that is large enough from a 'total addressable market' perspective from a carbon and value (in dollars) perspective that the founders want to address.

This method is the result of discussions with 80-200 potential customers, experts in the field, and ecosystem partners to find insights and incentives that connect pockets of carbon and dollar value.

“After having [playbook], we developed a business model and tested it in the market. At this point we were confident that this was a 100x100 opportunity and more importantly, the founder was passionate about building his business. WMi invested and the founder launched his company. We work with founders individually, not as a group.”

For example, a partnership with an Indonesian businessman, Benny Batara, to launch BumiBaru which restores degraded land in Indonesia by turning it into a profitable agricultural area.

Because it focuses on business model innovation rather than deep technology, through the 100x100 thesis the founders do not need to have a background in this field or expertise in a particular field. Instead, WMi looks at how they can overcome market inefficiencies through the application of environmentally friendly technologies.

For example, one of its portfolios, Rize, is a joint venture between Temasek, Breakthrough Energy Ventures, and GenZero. Rize is decarbonizing rice cultivation - the second largest driver of agricultural emissions globally - by offering cheaper inputs (fertilizer, seeds, etc.) to create incentives for farmers to adopt sustainable farming practices.

Another portfolio, Helios, aims to accelerate the adoption of residential solar energy, through the creation of Southeast Asia's first solar mortgage. Helios gives customers access to cheaper mortgages by installing solar panels on their roofs.

Close fund firstly,

In December 2023, WMi announced have collectedfund the first for $60 million. This achievement is said to exceed the initial target of $25 million. This additional capital will allow the company to expand its portfolio of companies and continue to make follow-on investments in top-performing businesses up to its Series B funding round.

The LPs joining this fund include the United States Development Finance Corporation (DFC), British International Investment (BII), and Triple Jump / DGGF, Beacon Capital, the venture arm of KBank, and the Autodesk Foundation, the philanthropic company of Autodesk Inc.,

To date, WMi has launched and invested in six companies, has an additional four in development, and is in the process of launching its first companies in India and Australia. His current portfolio includes:

• Agros - sustainable farming platform for horticultural farmers
• WasteX - a distributed biochar technology company that captures agricultural waste emissions
• Rize - a platform for farmers to reduce methane emissions in rice cultivation
• Helios - Southeast Asia's first residential solar mortgage company
• BumiBaru - degraded land reversal company in Indonesia
• RegenX - a regenerative agriculture platform focused on crop commodities such as coffee and cocoa

WMi's initial portfolio has raised funding from prominent investors, such as Norinchukin Bank, Schneider Electric, and Gaia Impact Fund, while the majority of its portfolio is poised to raise Seed and Series A rounds over the next 12 months.

“We focus on investing in founders who have gone through the process venture build with us."

Cheong believes impact startups in Southeast Asia are still in their infancy, so they are mostly focused on commercial scalability with impact as a secondary consideration or impact with slower growth.

However, there are some exceptions, such as eFishery in Indonesia which has had a tremendous impact on the livelihoods of fish farmers in Indonesia while building an agritech unicorn.

"Our thesis is that it is possible to build a startup that is highly scalable and has a significant impact on the climate," he concluded.