Asia's Climate Technology Breakthrough: Identifying the Key Element for Prosperity
In the heart of the Asia Pacific region, Singapore played host to TLC 2025, a significant event that aimed to promote innovation in climate tech and sustainable finance. This year's focus was on solutions for hard-to-abate sectors like aviation, aligning with the United Nations Sustainable Development Goals (SDGs) 9, 12, 13, and 17.
One of the finalists at TLC 2024, Nandina REM, showcased their solution to produce circular carbon fibre materials recovered from aircrafts. The startup's innovative approach demonstrated the potential of climate tech startups in addressing the challenges of sustainable development.
However, early-stage climate tech startups globally, including those in Singapore, face numerous challenges in securing funding. These include funding gaps and investor reluctance, lack of investor incentives and regulatory hurdles, shortage of skilled talent, global economic uncertainty, difficulty differentiating innovative technologies, and a lull in investments following the exuberance during the Covid-19 pandemic.
Experts offer several recommendations to overcome these challenges. Programs like ClimAccelerator APAC can help by plugging funding gaps and providing mentorship on product strategy, market access, and funding, while encouraging cross-border collaboration in the Asia Pacific region. Governments and financial bodies should establish clearer regulatory classifications to tailor policy support and tax incentives more effectively.
Launching regulatory sandboxes and secondary equity markets can foster innovation and provide exit options for investors. Governments should offer tax breaks and incentives for angel investors and early backers to stimulate funding flows. Startups need to adopt an international outlook to attract global investors and expand market opportunities beyond their local ecosystems.
Founders should focus on proving early market traction and commercial validation to build investor confidence. Addressing the talent shortage by attracting and developing skilled professionals in critical roles is essential for growth.
In the challenging climate for climate tech startups, where investors are hesitant to commit to fundraising, it's crucial to prioritise the ease of implementation of a solution to increase the potential of getting more buy-in from adopters. Climate tech solutions must be effectively priced to attract customers and designed for easy integration into existing systems or processes.
Technology risk is often less of a problem for startups compared to the uncertainty of market development and supportive policy frameworks. Startups in hard-to-abate sectors like aviation may need to work in consortiums or alliances to achieve their goals.
Singapore provides support to startups in the climate tech space, making it a testbed for climate-related solutions. The city's efforts are part of a broader effort to support climate tech startups in the region. The winners of TLC 2025, selected from various climate tech startups, will no doubt continue to push the boundaries of innovation in the climate tech sector.
- The climate tech startup, Nandina REM, demonstrated at TLC 2024 the potential of such startups in addressing challenges of sustainable development, specifically by producing circular carbon fibre materials from aircrafts.
- Despite their innovative approaches, early-stage climate tech startups, such as those in Singapore, often face difficulties in securing funding, due to factors like funding gaps, investor reluctance, and regulatory hurdles.
- To overcome these challenges, experts recommend programs like ClimAccelerator APAC, which can help by plugging funding gaps and offering mentorship, while encouraging cross-border collaboration in the Asia Pacific region.
- For startups in the climate tech space, it's crucial to focus on early market traction, commercial validation, and addressing talent shortages to build investor confidence and attract global investors.
- In the challenging climate for climate tech startups, Singapore, with its support for startups in the climate tech space, serves as a testbed for climate-related solutions, contributing to a broader effort to support these startups in the region.
