Start-up profiles: Sustainability agendas

CLEAN MOBILITY – GREENCELL

Ashok Agarwal’s team is four months away from the official launch of GreenCell Mobility, an intercity electric bus service in India. But they have a much bigger long-term goal – creating India’s largest fleet of private electric buses.

GreenCell was incubated last year by EverSource, a joint venture launched by India’s Everstone Capital and UK’s Lightsource BP. Agarwal was brought in as CEO from Essel Infraprojects, where he first discovered electric mobility while working on smart city projects.    

The total cost of ownership for electric buses has fallen on a per-kilometer basis for long haul journeys to the point that they can now be cheaper than the Volvo diesel buses popular among Indian travelers. This has coincided with the government announcing it would subsidize the purchase of 7,000 electric buses for operators.

“The writing is on the wall for diesel buses,” says Agarwal. His team has bid for tenders to ply bus routes in six cities. They have ordered 48 buses so far and plan to secure tenders from other companies so they can service more routes and get more subsidies. They hope to grow to a fleet of 500 electric buses within two years.

Intercity travel is hotly contested – there are over 4,000 companies – and a national player has yet to emerge. GreenCell is seeking to emulate famous bus companies like Greyhound in the US or FlixBus in Germany by installing passenger lounges and air filters and by developing an app that allows customers to opt for a noiseless cabin experience and an emission-free journey.

“For bus pick-up and drop-off, families wait at the road with their children and luggage in heat or rain,” Agarwal explains.

Initially, GreenCell will ply intercity routes, in south India. Next year, GreenCell will begin its intracity plans in earnest as well. The subsidy program has supported the procurement of 2,450 electric buses to date, mostly by state bodies that run urban mobility services. In time, it is hoped that a continuing decline in the cost of batteries and improvements in vehicle range will result in subsidies no longer being required.

 

Coal is the source of 59% of China’s total energy consumption, which makes burning it efficiently an indispensable part of the country’s decarbonization goals.

AllSense technology, backed by investors including Hillhouse Capital and Cathay Capital, is tackling this challenge with an internet-of-things (IoT) solution that digitizes thermal power. The company collects data and calculates optimal operating parameters in real-time to precisely control the production process, saving fuel, and reducing wastage. This process also helps reduce the initial formation of greenhouse gases from the burning of coal.

“A thermal power plant usually operates in a three-shift system with 20 people in each shift, and each person monitors and controls one device, ensuring the plant runs smoothly,” explains Jiantao Xia, the company’s founder. “We replace these people with an intelligent system that automatically calculates parameters and controls the process at the same time.”

AllSense operates as a software-as-a-service (SaaS) model, with a typical customer paying a RMB2 million ($280,000) installation fee for the first year and about RMB1 million each following year as a usage fee. “We can bring a 3-5% fuel saving for our customers, or about RMB5-10 million fuel cost savings each year,” says Xia.

The company served 10 large-scale thermal power plants in 2019 and expects to onboard another 20-30 this year. “We will be at break-even this year and will achieve profit next year,” says Xia. The next step is to expand the solution to other high-energy-consuming industries with high requirements for heat and electricity such as papermaking and metal smelting.

“It should be an industry with a relatively automated and standardized procedure. But it should not be too concentrated like China’s three leading oil companies,” says Xia. “If we serve them, it will be project-based business, instead of a standardized SaaS model.”

 

Back in Iran, the presumed career path for water-focused engineer Mohammad Sherafatmand was to join the giant domestic oil and gas industry, but an interest in inclusive impact led him to a more sustainable career during his studies in Singapore.

“I wanted to divert into environmental engineering because when you’re talking about oil and gas, you’re only talking about the countries that are involved in it,” he says. “But every single country and every single community has water issues.”

Sherafatmand was six months into postdoctoral work at the National University of Singapore when he pulled out to establish HydroLeap, a wastewater treatment start-up that uses a clean, electricity-based process for removing contaminants from water.

Wastewater treatment is an essential aspect most industrial processes and almost entirely realized by chemical coagulation flocculation, a filtration method that has traditionally escaped intense environmental scrutiny due to a lack of immediately obvious damage.

“You might not be able to see the side effects of these chemicals in water bodies now or even five years from now, but can you assure me 20-30 years down the road there will be no environmental impact?” Sherafatmand says. “I think there definitely will be because they’re made of polymers.”

HydroLeap’s electricity-based method results in 3x less polymer-laden sludge than traditional techniques by eschewing the use of chemicals and optimizing the coagulation process. Part of the problem with the traditional approach is that the water being treated must be sampled and tested periodically to maintain the correct dosage of chemical coagulants. Both under-dosing and over-dosing will lead to contaminated water.

Electrocoagulation is cheaper than chemical treatment and highly automated. VCs buying into the idea include Wavemaker Partners, 500 Startups, SGInnovate, Sparklabs Global Ventures, and Entrepreneur First.

The construction industry has been the initial focus, with recent jobs said to include Facebook’s upcoming data center project in Singapore. But mining, agriculture, food and beverage, and manufacturing are all on the expansion agenda.

“We have already started working with different system integrators and partners outside of Singapore to establish this methodology as the dominant process in wastewater treatment globally,” Sherafatmand. “So we might open more offices and branches as we grow, but we want to remain a technology-focused company so we’ll be flexible to innovate. I’m an engineer at heart.”

 

More than 68 million Australian carbon credit units (ACCUs) have been issued since the market was established in 2011 and 47 million of these have been delivered. GreenCollar, which has been involved from day one, is responsible for about 20 million of these deliveries. It is contracted to deliver another 50 million over the next decade. Each unit equates to one ton of carbon abatement.

The government’s Climate Solutions Fund used to be the major buyer of ACCUs but private sector participants are increasingly looking to offset emissions.

“We’ve never had a problem convincing people our products are worth buying. Demand for carbon in Australia, even in the context of today’s economy, is very strong,” says James Schultz, CEO of GreenCollar. “It’s more about supply, managing something from identification of what can be done to issuance of the carbon credit.”

GreenCollar works with landowners and managers – often farmers – throughout Australia on the development of revenue-generating forest protection and land restoration programs. Once these are operational, it facilitates the sale of carbon credits.

The fundamental challenge is that it’s a people business. “There is no shot cut to developing these projects. You are entering into long-term relationships with project partners or land holders, and it takes time to establish trust and credentials. The market depends on its transparency and general rigor – and one of our strengths is a strong footprint on the ground with deep technical capacity and capability,” says Shultz.

This represents a constraint on scale, so GreenCollar recently took an investment from KKR’s global impact fund to help alleviate the pressure. “There’s a lot we want to do in terms of diversification – water, plastic, biodiversity, new geographies, new methodologies – and we didn’t want to give up on any of them,” Shultz explains. “We wanted a partner that could accelerate growth.”

 

Most people don't know what’s behind the ingredient labels on foods they eat, and most wholefoods such as chicken come with no information on how they were produced. Even within the agricultural industry, the rules are so lax, farmers know little about the origins of their feed, which often feature cryptically simplified ingredients.

“This matters,” says Leo Wein, founder and CEO of Singapore-based insect farming technology company Protenga. “Southeast Asia has some of the largest poultry per-head consumption in the world, and it’s growing rapidly. This is 100% dependent on soy and corn imports from the US and South America. It’s responsible for massive losses of arable land and biodiversity and fertilizer leaching that you can see from space.”

Protenga’s plan is to collect pre-consumer waste – especially palm oil byproducts of the palm oil industry – and convert it via insect farms into larval protein that is used to create feed for a range of livestock. Protegna will handle the marketing for interested farmers, guaranteeing offtake for all animal products created by using the system. The company also aims to breed its insects to be optimal for clients’ particular nutritional needs.

Much of the technology here is established, although there remain challenges in ramping up the protein percentages to the levels required by industries like aquaculture and pet food. Protenga is set to overcome that hurdle – thanks in part to a recent investment from genetics specialist Roslin Technologies – but its main differentiator is a distributed model that mimics the fragmented food production and supply chains of tropical Asia.

Most insect famers attempt to achieve economies of scale through massive centralized facilities, which drive up costs over time due to the difficulties of channeling together waste inputs from different locations. Protenga’s modular units will handle 20 tons of biomass per day at the processing centers adjacent to plantations. That’s less than a tenth the size of the large-scale facilities at centralized farms. 

“If we take 20 tons of sludge input into our facility, it means those 20 tons are not dumped into the environment,” says Wein. “They don’t become breeding grounds for vectors. They don’t rot and emit greenhouse gases. Their nutrients don’t leach into the ground. That’s a tangible and quantifiable environmental value.”

 

In 2018, Abhilasha Purwar was working as an associate at a private equity firm when she heard about how poor road visibility led to an accident on the Yamuna Expressway. Having grown up not too far away in Ghaziabad, the news startled her. A few years earlier, Purwar had done research on air quality at an India-based non-profit organization. Clearly, things were getting worse.

“I am a sportswoman but thinking that a 10-year old girl might not have the same lungs or run like me upset me,” she says. “I called my brother and we had a strong desire to do something.”

Returning home, Purwar felt that only an entrepreneurial solution would work. Alongside her brother, Kshitij Purwar, she launched Blue Sky Analytics, a platform consisting of a suite of APIs that allows users to extract different types of environmental data sourced from private and public satellites. It tracks historical and real-time data on air quality and farm fires across the world with soil and water quality in the pipeline. 

“Our air quality data set has witnessed more than 2.5 million hits,” she says. “Lawyers have used the data on forest fires to challenge bureaucrats that claimed improvements in the Indian state of Haryana.”

Blue Sky is part of Climate TRACE, a global coalition of start-ups using artificial intelligence and data science to improve the tracking of greenhouse emissions. Recently, Beenext Capital led a $1.2 million seed round, backing the Purwars’ mission to help the world understand every pixel on the planet and evaluate emerging climate risk. It’s work that academics have been doing for a while but cloud technology and internet platforms make it more accessible.  

“We are in the middle of a recession because of a sub-microscopic particle,” Purwar adds. “Just imagine what might happen if climate change leads to similar economic shocks. We want to move the world in a direction where every policy or investment decision that can be impacted by climate change uses the right data.”

 

When Florian Holm ended his tenure as co-CEO of Lazada Indonesia in 2018, he had one thing on his mind: build a product and brand. He ended up building prefabricated homes that blend in seamlessly with nature and cause no harm to it.

“Leaving Lazada, I was enticed by something less about innovation,” Holm says, reflecting on his four years with the Southeast Asia-focused e-commerce platform. “And the way things are built here is pretty much the same as 50 years ago.”

He teamed up Alexis Dornier, a German-born and Bali-based architect, and they established Stilt Studios. Less than 12 months later, the company has three resort projects underway in Bali where it serves as designer and operator and several other design-only commissions across Indonesia. There are currently orders for about 50 buildings on the books.

There are four key products: three versions of a treehouse and a “tiny tetra house” that incorporates recycled Tetra Pak materials, as well as wood, glass, and steel. Sustainability is woven into the design, beyond the choice of building materials. All the structures stand on stilts to minimize the ground plot size while prefabrication ensures efficient use of money, time, manpower and resources.

Buildings range from 40-70 square meters and from $30,000-80,000 in cost. And they are not 100% sustainable – Holm estimates that would add at least 50% to the cost. “We are trying to get to 80%; the last 20% is very difficult,” he says. “We want a product that has impact but is still affordable.”

Stilt Studios is entirely self-funded, and Holm doesn’t think the business is suited to the classic VC model. To this end, he is talking to a potential strategic partner. The goal is to grow as a pure design contractor, with a portfolio of 30-50 products and construction partners in different markets. “We get random emails from all over the world, but the challenge is how do we make sure we are getting the word out and educating the market,” Holm says.

Putting in place systems to build scale is something he picked up at Lazada, but there is one other lesson he values even more highly: “You can have all the technology, you can know how to execute, but without a good product you will only get so far.”

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