Melvyn Yeo, Founder and Managing Partner at TRIREC
Since its inception in 2015, TRIREC has been at the forefront of venture capital investment with a commitment to decarbonisation. Focused on tackling climate change, the Singapore-based firm allocates 80 per cent of its investments to early-stage companies, spanning pre-Series A to Series A.
With a diverse global portfolio across energy, mobility, food and agriculture, buildings, and hard-to-abate industries, TRIREC aims to reduce or eliminate greenhouse gas emissions. As the firm approaches its 10th anniversary, it celebrates a milestone—the first close of its third fund—and gears up to honour its decade-long journey while charting its future trajectory for the next ten years.
Expanding its impact, TRIREC has also achieved the first close of a new fund targeting energy access for underserved rural communities in Africa, India, and Southeast Asia (SEA).
“We are quite unique in that we do not necessarily follow market trends. From an investment perspective, we focus on the problems and the solutions. And these solutions could be anywhere in the world,” says Melvyn Yeo, Founder and Managing Partner at TRIREC, in an interview with e27.
Before founding TRIREC, Yeo spent over a decade at Goldman Sachs (Asia) managing global multi-asset portfolios and co-founded Thirdrock Group, a leading multi-family office acquired by Schroders in 2019. At Schroders, he held senior roles, including Deputy Head of Wealth Management (Asia) and Co-Chair of the Private Assets Investment Committee.
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Yeo serves on the board of the Singapore Land Authority and is a member of the Climate Reality Leadership Corps, founded by Al Gore. The Corps advocates for climate action globally.
In this interview, he discusses upcoming trends in 2025 and the different factors that will lead to it. The following is an excerpt of our conversation with him.
What are the main challenges that the ecosystem will face in 2025 in terms of fundraising?
Fundraising challenges will still be pretty similar [to 2024] in that it will be all about distributions [of funds]. Many investors have invested in funds; because of where the capital markets have been from 2022 until now, there have not been that many exits.
Without exits, whether through IPO or trade sale, many funds have been unable to distribute back capital to their LPs. As a result, many LPs are not looking to deploy to new funds, at least not in a bigger amount.
We need to see some of the cash flows coming back before further deployments.
Now, if we want to discuss fundraising for startups, that part of the equation is slightly better because many funds still have their dry powder, especially those that raised capital in 2022. Plenty of them have not deployed the full amount yet.
Over the last couple of years, many VCs have been very conservative in investing in new deals. They want to see more traction and more revenues before they can deploy. The last couple of years have been all about trying to adjust to that new norm, and I think that startups are now recognising that they need to build a more fundamentally sound business to attract the right investors.
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If we consider factors such as the geopolitical situation today, will 2025 be an even more challenging year?
It depends on the investment mandate and the geographical coverage of the funds.
The latest US election results … I think it will have a positive impact on SEA, in general, from an economic perspective. Because I am sure that the new president would have certain views on how to drive the domestic economy and make the country much stronger. But I think a lot of that will be directed at China, which will allow SEA to pick up the slack.
The other part of the equation is that, from a geopolitical perspective, there will be a much bigger bifurcation of investments. From a technology perspective, we have really started to see over the last few years that certain deep tech research and development is bifurcating into two directions, right? You have the Chinese semiconductor industry trying to build up its capabilities there, and it is adopting different standards compared to the Western world.
It is a consequence of the geopolitical volatility that we are experiencing today. From an investment perspective, we have to be mindful of [the fact] that certain sectors will be more affected.
Are there any particular verticals that will be more popular than the rest?
The last 12 months have been all about AI. I think AI as a theme will continue, but investors will be a lot more discerning when it comes to AI investments.
After the initial hike, investors will be more diligent in identifying what we mean by LLM, machine learning … before they start drilling down to the actual applications [of the technology].
We know some people just slapped the term AI and hope for a higher valuation, so investors will be more discerning. Is there really a business model here, a revenue model?
I also think that climate and decarbonisation will continue to attract interest and grow in this part of the world.
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What happened in Trump’s last term was that the private sector actually picked up the slack and drove the impetus in terms of driving the adoption of a green economy, as opposed to the federal side. I think that is not going to stop, you know? If you look at the likes of Amazon, Meta, and Google, they are very committed to this whole green affair.
When I was in Jakarta this year, many corporations were talking about how to build renewable energy projects, solar panel systems, and carbon credits. Even just in the last six months, going around Jakarta and Surabaya feels very different.
EVs and EV charging as a theme are quite mature already, so most of the investments [in the sector] are going through a consolidation phase. The focus is now moving towards the power-generating side of things and carbon capture, not just in Indonesia but also in Malaysia and Thailand.
The other theme that is receiving a lot of attention is the fintech side of things, with the growth and maturity of digital banks. This would actually add more flavour to the offering in the region as well.
Gone are the days when [its function] was restricted to helping you open an account faster. We are going to see a lot more products and applications that can be done on digital platforms.
How about the stages of investment? Are we going to see the return of early-stage funding?
Early-stage funding has dropped off quite a bit, but I think it will start to pick up again, partly because those who raised funds in 2021-22 will need to deploy them.
There will also be some later-stage investments. So, I think 2025 will see a pickup in investment across the board compared to 2023 and 2024.
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Image Credit: TRIREC
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