VCs get behind Disaster Tech in search for innovative life-saving technologies

The COVID-19 pandemic is driving unprecedented interest into ESG investing, for reasons including business risk preparedness, portfolio diversification, protecting local communities, and more. Companies that can play life-saving roles in natural disasters and directly strengthen the resilience of communities may stand to benefit.

We already see technology being used to track, trace and reduce COVID-19’s impact. In broader natural disasters, companies are coming up with innovative Disaster Tech or “D-Tech” solutions. These can vary from Google’s early flood warning system in India and the Red Cross’s disaster notification and first aid app, to startups such as One Concern, an AI platform for predicting earthquakes and floods, and Field Ready, a manufacturing company that specialises in 3D printing kits of essential medical devices deployed in refugee camps.

Venture capitalists see the opportunity for D-Tech

VCs acknowledge the need for D-Tech, especially in today’s environment.

Puja Bharwani, Director of Antler, commented that “D-Tech is an important vertical and it is one where corporations, governments, technologists and entrepreneurs have to work together to ensure the proposed solution has the desired impact given the scale at which it needs to be implemented.” Antler is a global early-stage venture capital firm with offices in twelve cities across six continents. Founded in Singapore in 2017, Antler aims to fundamentally improve the world by enabling and investing in the world’s most exceptional people.

With growing investor demand for ESG investments — assets have grown 14% annually from 2014 to reach US$31 trillion in 2018 – D-Tech offers opportunities to support profitable, high growth business, while providing sustainable social and environmental benefits.

Dominic Mellor, Senior Investment Specialist at ADB Ventures, added that “D-Tech has a role to play alongside technologies for planning and managing infrastructure, making local economies more diverse and resilient, and reducing greenhouse gas (GHG) emissions.”

Asia Pacific accounts for almost half of the world’s natural disasters. China, India, Indonesia, and the Philippines, the top four natural disaster-prone countries in Asia, are expected to lose $380 billion each year between 2016 and 2030 as a result of natural disasters. D-Tech provides a way to reduce this impact.

Minette Navarrete, President of Kickstart Ventures (KVI), a corporate venture capital firm with a focus on the Philippines and the greater Southeast Asian region, commented that “KVI has an active focus on emerging markets, which are prone to disasters. A number of invested companies have clear, immediate usefulness in disaster situations.”

Bit Santos, Portfolio Operations Director of KVI, added that developing markets like the Philippines and others in Southeast Asia offer “opportunities for startups to address fundamental problems” such as those posed by natural disasters. Examples include engageSpark, which supports messaging services in areas of poor data reception; and AIAH’s KIRA, a chatbot that shares information and automates health checks.

These are just a few of the many great initiatives spearheaded by startups that can help turn the tide for affected communities in times of disaster, and whom VCs can help support and supplement with necessary resources.

Solving industry problems

Like any venture, D-Tech companies need to pass VC’s business viability tests, while also facing challenges specific to the field of disaster resilience: slow cash flow, lack of patient capital, and the need for community sensitivity.

“D-Tech firms are particularly vulnerable to funding and cash flow problems as a result of their relatively long sales cycles”, Mellor explained. “By their nature, the positive impact of D-Tech firms cannot be immediately felt until after a catastrophe has happened. Clients may therefore feel they are not getting immediate results”. Navarrete added that “firms will also have to contend with the delicate nature of private companies selling services at a time of crisis, which could naturally create a negative impression of profiting from a disaster”.

To help D-Tech start-ups grow, VCs can play a significant role by acting as connective bridges with the government and established institutions. Furthermore, the backing of a reputable VC can provide much-needed credibility to early-stage start-ups.

“For Antler, we work with various stakeholders and entities in the tech ecosystem to ensure startups get all they need — a similar ecosystem approach needs to be taken for D-Tech as well,” said Bharwani.

ADB Ventures, KVI, and Antler noted that startups within their portfolios will gain access to important operational networks across governments, municipalities, large corporates, and even non-governmental organizations. Startups may also gain added advantages specific to their VC’s firms, such as ADB’s reputational advantage, access to Antler’s global alumni and advisory network, or introductions to large corporate networks that Kickstart Ventures is connected to (such as Globe Telecom and Ayala Corporation).

Also read: Disaster Tech innovation is key in mitigating the impact of natural disasters

Prudence Foundation supports D-Tech growth

As the community investment arm of Prudential in Asia and Africa, Prudence Foundation leverages Prudential plc’s long term commitment and geographical scale to make communities safer, more secure and more resilient, by addressing key issues in education, health and safety.

Over the years, Prudence Foundation has worked to improve disaster resilience, most recently through the Safe Steps D-Tech Awards which aims to find, fund and support innovative technology solutions which save lives before, during and after natural disasters.

Donald Kanak, Chairman of Prudence Foundation stated “We wanted to see more focus on applying technology to making disasters less disastrous”.

The D-Tech Awards has partners in both the for-profit and not-for-profit sectors, including e27, Antler, National Geographic, the International Federation of Red Cross and Red Crescent Societies, the Asian Venture Philanthropy Network (AVPN), among others.

“It is through partnerships between the private sector, governmental and non-governmental organizations that real impact and inroads can be made,” said Marc Fancy, Prudence Foundation’s Executive Director.

Through the competition, startups are invited to pitch their solutions to a panel of judges — including VCs — for the chance to win grants from a pool of US$150,000. Finalists will also benefit from expert coaching and networking opportunities. Both for-profits and not-for-profits are welcome to apply and will be judged separately. Applications for the next round will open in November 2020.

Prudence Foundation, in partnership with e27, will be hosting two private working sessions on D-Tech on 27th and 28th August and encourages VCs to offer their advice and insight into growing D-Tech startups. If you are interested to participate in the conversation, please kindly answer this survey.

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This article is produced by the e27 team, sponsored by Prudence Foundation.

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