Updated: Nov 30, 2020
Words by Lim Li Shian
This article was originally published on The Business Times on 7th February 2019
Quest Ventures is an 8-year-old firm that invests in social organisations to help unlock potential and scale their impact on society.
Rika Purnamasari (second from right), entrepreneur-in-residence at Quest Ventures, conducting due diligence prior to investment at a sustainable farming practice in Indonesia. | Photo credit: Quest Ventures
CAROUSELL is an app that occupies a spot in almost everyone's mobile phone today and was conceived to provide a solution for the lack of consumer-to-consumer platforms at the time it was launched.
Venture-fund firm Quest Ventures, one of the companies that has a stake in Carousell, saw how such startups were solving real-world problems and decided to adopt an environmental, social and governance (ESG) focus for its corporate social responsibility (CSR) activities.
Quest Ventures senior analyst Khor Qianyi said: "There can be a very nice blend of impact investing when it comes to these few things. It can solve not only the capital problem but fund companies and continuously do good work and ensure that they are financially sustainable."
ESG scores are tools for sustainable investing and the approach looks at the environmental, social or governance risks that can potentially limit the investment returns when it comes to committing the initial outlay. With the ESG approach, Quest Ventures aims to support passionate founders in solving social issues, not only with capital but with their network and resources - such as mentorships and partnerships - which can help them scale their impact.
"It's all about the people. You can have a brilliant idea, but in the end if the person behind it is not passionate, it will just be an idea," said Ms Khor.
For example, Hatch is a startup established by Victor Zhu to provide training and job matching to youths-at-risk. Mr Zhu recognised a problem with hiring talents in the technology sector and noted that there were many at-risk youth who were idle.
He decided to equip them with technology skills such as digital marketing, user interface, and user experience design. They would then be placed in company startups after they complete their training.
This not only helped these young men and women gain knowledge and skills but also allowed their families to regain confidence in them.
Said Mr Zhu: "Quest Ventures is a strong supporter of what we do and helped us refine our framework to better match with market demands. In the same way that we place our faith in our youth, Quest Ventures has placed their faith in us and given us an opportunity to prove that our vision can truly be fulfilled."
Compared to the typical CSR activities, Ms Khor stated the ESG approach is more sustainable over the long term as it has helped the eight-year-old firm invest in social organisations and provide them with the appropriate resources they need at different stages, which has a greater impact as the organisations can uplift and empower themselves.
Quest Ventures generally invests around S$100,000-$500,000 in these organisations and may rope in other investors should the required investment be of a larger amount. It also will not take more than 25 per cent equity.
When asked what are some of Quest Ventures' upcoming plans for the year, Ms Khor stated that they will be rolling out the impact fund. Similar to a venture fund, this is a S$20 million fund Quest Ventures intends to put together to invest into 60 companies in South-east Asia with 50 of them being social enterprises.
As advice to companies that are interested in adopting the ESG method, Ms Khor says it is best to tap what they are good at so as to give back and make impact investments that are more sustainable in the long run.
Said Ms Khor: "I think skilled volunteerism or skilled mentorship is really the way to go as we can spend some time teaching a social enterprise the wealth of knowledge they have in their business. This could really help them a lot and scale their impact."
Noting that this concept is still relatively new to people, Ms Khor understands that some businesses still have concerns about how to generate profits yet give back at the same time. She assured them that this is not an impossible feat:
"You can make profits but always keep the society at the back of your mind. You should always be an enterprise with a heart."
View the original article here: http://bit.ly/hatchxbusinesstimes1