The Asian Development Bank (ADB) has launched the ADB Ventures platform, designed to invest in and support Asian startups working on solutions that align with the United Nations Sustainable Development Goals (SDGs).
To reach its target size of $50 million, the fund welcomes contributions from various partners, including the Nordic Development Fund, Climate Investment Funds, and the Government of Australia, which are providing crucial initial capital. Operations are projected to begin in the second quarter of 2020, focusing on early-stage startups that tackle environmental, social, and governance (ESG) challenges such as climate change and women’s empowerment. Notably, ADB Ventures has a fund lifespan of 17 years, allowing for long-term investments in selected projects.
According to Mike Barrow, Director General for Private Sector Operations at ADB, “The region is rich with technological solutions designed to conserve energy, minimize waste, combat climate change, and deliver essential public services efficiently.” He expresses the ambition for ADB Ventures to emerge as the largest impact technology platform in the region, aiming to attract over $1 billion in risk capital to achieve the SDGs by 2030.
Impact technology solutions are specifically designed to positively affect ESG factors. Barrow emphasizes that ADB Ventures will facilitate the market entry of these technologies by leveraging extensive operational networks and addressing the risk capital shortage faced by innovative early-stage companies in developing Asia and the Pacific, especially in smaller and frontier markets.
ADB differentiates itself from traditional venture capital funds by offering more than just financial support. The ADB Ventures Investment Fund 1, the core trust of this initiative, is complemented by a $12 million technical assistance program set to support startups over three years. This program has two components: the ADB Ventures SEED grant program, which promotes market expansion and de-risking of technology pilots, and the ADB Venture Lab, which provides innovation programs and generates pilot opportunities for portfolio companies.
This announcement reflects a broader trend among banks and major institutions to allocate resources toward sustainable ventures while re-aligning their portfolios to meet ambitious carbon-neutral goals. Industry leaders such as Goldman Sachs, Citigroup, BlackRock, and JP Morgan are among those making significant efforts in impact investing, particularly within the environmentally-focused fintech sector.