Private funding for climate technology companies in Southeast Asia exceeded $1 billion in the first 11 months of 2022, according to a report from Deal Street Asia last month.

This is the first time that climate tech startups, defined as those focused on reducing greenhouse gas emissions or addressing the impact of climate change, have raised more than a billion dollars in a single year. This marks a significant increase on the $607 million raised by climate tech startups for the whole of 2021.

Startups focusing on green businesses are attracting the attention of venture capital funds. Gibs Song, director of VSV Capital, said the fund has invested in more than 80 startups since its establishment in Vietnam in 2014.

“Vietnam is an emerging market, so now many startups are established and operating as social enterprises. We are targeting green trends and opportunities in Vietnam, especially transportation, renewable energy, and waste management,” said Song.

Besides investing in financial, educational, and medical solutions, VSV Capital is also particularly interested in the green sector with areas such as battery recycling, solar cells, bioplastics, nano-cellulose fibres, and e-vehicles. The fund recognises the urgency of environmental protection and the replacement of non-renewable energy sources.

Vietnam-based electric motorbike startup Dat Bike announced an $8 million round of fundraising in November that had been led by Singapore-based Jungle Ventures, with participation from several other funds. So far, Dat Bike has raised a total amount of $16.5 million.

Dat Bike plans to use this new investment to develop and upgrade their technology and recruit more sales and customer care staff to handle their rapidly growing orders. At the same time, the company will invest in expanding their production scale and developing a clean electric charging station for motorbikes.

Also in November, VECA, Vietnam's first mobile application for buying and selling scrap, launched a partnership with Tetra Pak to expand their used beverage carton collection drive to 18 districts in Ho Chi Minh City.

“VECA hopes that the expansion of the collection network in those districts will attract more sellers and collectors to use the application, thereby achieving the goal of a zero-waste Vietnam,” said Bui The Bao, founder of VECA.

Marina Tran Vu, founder and CEO of EQUO, a Vietnam-based sustainability startup that provides fully plastic-free and compostable solutions made of materials like coffee, coconut, and sugarcane to replace single-use plastics, said that businesses do not see sustainable development as a trend, but as a real need of the market.

"In the past, sustainability was seen as a trend like cryptocurrency. In fact, sustainable development aims to solve environmental, social, cultural, and political issues in the long run," Vu said. "Businesses recognise sustainability as not a short-term goal, rather, it is an investment in business and people.”

Vu emphasised that an important factor in promoting green business startups is to disseminate a keen awareness of the impact of an individual on the surrounding environment and future generations.