
Q&A: Amasia’s John Kim

John Kim, co-founder of Singapore and US-based Amasia, explains how a climate impact thesis “swallowed up” his generalist VC firm and shifted its focus from technology to behaviour
Amasia closed its debut fund at USD 25m in 2015 and a second fund of about USD 50m in 2019. It plans to go to market for Fund III at the end of this year or early next year. Assets under management total about USD 450m, most of which is held in special purpose vehicles. Standout portfolio companies include GoTo, Xendit, and Go1.
Q: How do you define your strategy?
A: We consider ourselves a sustainability-focused venture capital fund. A lot of people would say we’re impact. Historically in Asia, we’ve been hesitant to use that terms because there’s an association that impact funds return less money. But there’s an increasing understanding that not only are impact and returns not mutually exclusively – they’re mutually reinforcing. If your business model as a fund manager or a portfolio company is not aligned to sustainability and impact, you’re just not going to be able to be successful. We’ve seen the numbers. There are more data and academic studies coming out to that regard.
Q: Have you formally prioritised returns over impact or vice versa?
A: We don’t prioritise one or the other, but the history is that these two separate parts of our lives have come together. Both Ramanan [Raghavendran], my co-founder, and I have always been focused on giving back, and our journey of giving back mirrors what’s happening in the overall commercial space. We used to think that you have to make money at something and then give back to non-profits in another bucket of your life. Around 2017-2018, we started to develop this thesis around behaviour change to fight the climate crisis. For us, it was this realisation that we don’t need to sacrifice one to do the other.
Q: What are the challenges of doing this in Asia?
A: There is still a little bit of a divide in many of the large conglomerate-owning business families. The younger people get it – the generation that is starting to take over and have more influence in these groups. They understand and are fully on board, but some of the patriarchs think it’s a narrative but not something very substantive. The other thing is that whenever there is momentum, there tends to be more noise. It’s not quite a bubble yet, but it’s getting difficult to sift through what is really substantive versus who is just following a trend. There’s a lot of greenwashing.
Q: How is the noise factor different in Asia?
A: It exists a lot more in emerging markets than in developed markets. When you’re doing diligence in the West, it’s easier to get quality information that is reliable. Over here, I was an oil trader at Goldman Sachs for a number of years, and you couldn’t trade around the data that the governments put out. I was also on the Tokopedia board before the merger with Gojek, and it was very frustrating. At any given point, there were five number-one e-commerce companies in Indonesia. To see who’s for real, you have to do a lot more primary research. That’s going to get more acute as more funds get raised and add to the noise.
Q: What have you heard from LPs about your climate thesis?
A: We’ve always been thesis driven. We had a crypto thesis in 2013, an e-commerce thesis in 2014, and cross-border SaaS [software-as-a-service] in 2015. We published the climate thesis in 2019, and it was one thing when it was just another sub-thesis of the firm, but it quickly swallowed up all of our investment activity. Our LPs have been very supportive and quite mission aligned. We haven’t had any feedback from those that might be sceptical. They’ve seen the historical returns, which have been relatively good, so we’ve built some trust. Any new LPs will likely be from the US, so we don’t think there’s going to be a lot of friction from them.
Q: Is it harder to do impact in Asia?
A: Even with the younger generation getting it, just building any company in Southeast Asia is harder. When we first invested in Tokopedia, I asked the team, ‘How do you build a scalable back-end infrastructure in Indonesia?’ And nobody had ever done that. They literally went on Google and typed out, ‘How to build scalable back-end infrastructure.’ Whenever you build something here, you have to have a do-it-yourself mentality as opposed to the US, where everything is very siloed and there’s a rich ecosystem of sub-products to partner with. The delta is narrowing, but it’s still harder here.
Q: Behaviour change is one of your guiding themes. Can you explain?
A: If you look back at the world from 1800 to today, our overall emissions have risen by about 1,000x. Population growth is worth about 8x of that, but the overwhelming majority of our growth in emissions is per capita. We’ve seen a lot of breakthrough technology – and we applaud that as part of the solution – but it hasn’t actually solved things. Per-unit emissions on anything you buy are lower than ever. The problem is the fact that as manufacturing gets more efficient, we’re consuming more, and our overall emissions go up. That’s the Jevons paradox.
Q: How is this implemented in your strategy?
A: We developed a thesis called the four Rs of behaviour change, review, renew, rethink, and rebuild. Review has to do with the idea that what gets measured gets managed. That’s about understanding what your carbon footprint is and a little bit about offsetting your footprint. Renew has to do with the circular economy. We believe companies like Tokopedia, eBay, and Carousell are doing good in terms of lowering our footprint through re-commerce. Rethink is using remote services; Zoom probably did more for the environment than any other single company during the pandemic. Rebuild is about cutting the middlemen out of supply chains.
Q: What does it mean to pursue these ideas in the context of a global pandemic recovery?
A: There are parts of this thesis that are a little bit slower. For instance, we saw a huge spike in the usage of Zoom and other remote work companies – we have a somewhat similar company called Dialpad. But usage numbers, subscriptions, and revenues for some of these companies are already slowing. I don’t think they will reverse back to where they were or anything close to that, but they maybe won’t grow at quite the same pace. Trying to figure out carbon footprint and supply chain issues will probably accelerate as we come out of COVID. I believe we’re at the beginning of a very long structural trend.
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