Touchstone Partners launches US$10 million climate-tech fund, tapping Net Zero Challenge to attract global startups to Vietnam
Annual startup competition, co-organised with Temasek Foundation, has attracted more than 1,600 applications over the past three years
[HO CHI MINH CITY] Touchstone Partners has launched a US$10 million Green Transition Fund aimed at accelerating Vietnam’s green transition, driven by the firm’s confidence in its “high-impact, high-return” investment thesis for climate-tech startups and the supportive policy environment in the South-east Asian country.
The Ho Chi Minh City-based venture capitalist seeks to leverage its annual competition, Net Zero Challenge, co-organised with Temasek Foundation, as a strategic platform for investment opportunities and to attract global startups looking to pilot their solutions in Vietnam as a foundation for regional scalability.
The three editions of the competition have received applications of more than 1,600 climate-tech projects from approximately 60 countries and territories over the past three years.
“Vietnam is one of the world’s leading agricultural producers, which also means it generates significant agricultural waste. These two factors make the country an attractive location for climate adaptation and agri-tech solutions,” said Ngo Thuy Ngoc Tu, general partner at Touchstone Partners.
The Net Zero Challenge 2025 culminated in a grand finale on Friday (Nov 21) in Ho Chi Minh City, with 20 billion dong (S$991,730) in catalytic grants and investment prizes awarded to three projects focused on renewable energy, sustainable agriculture and circular economy solutions.
This year’s competition is the most competitive among the three editions, with a record 700 submissions driven by its expanding international influence through a strong network of global partners and the successful pilot projects of previous winners, Tu added.
She highlighted the strong interest of startups from South-east Asia, as well as larger markets such as China and India, which face similar climate challenges to Vietnam – one of Asia’s fastest-growing economies and among the world’s most climate-vulnerable countries.
Pilot market for regional innovations
At the finale, Vietnam Food (VNF), a company utilising a chitosan-based solution, RetriV, to extract valuable nutrients from food wastewater, received three separate investment offers of US$50,000 each from 38M Ventures, AiViet Venture and Touchstone Partners.
The Vietnamese company was founded in 2014 as a shrimp co-products processor and has since grown into one of the world’s largest producers of chitosan derived from shrimp.
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RetriV is a spin-off project from VNF’s research and development efforts over the past two years, aiming to tap a “blue ocean” market with no significant global competitors in upcycling shrimp byproducts to reintegrate recovered nutrients into feed, food and circular value chains.
“We are defensive not only because of our intellectual property but also due to our extensive access to the local food manufacturing supply chain,” said Phan Thanh Loc, VNF’s managing director.
Meanwhile, Shoes Agtech, which develops ultralight farming robots in Vietnam, won a US$50,000 cash prize from Sembcorp Industries.
The two Vietnamese startups were named grand prize winners in their respective tracks, alongside Alcarbo Technologies from Hong Kong, which uses algae photobioreactors to capture and convert carbon dioxide into valuable by-products. “Vietnam is a great starting point, especially for making product blueprints,” said Nelson Ng, founder and chief executive of Alcarbo Technologies, which won the challenge’s renewables and carbon removal track. “We can make our solutions cheaper and better here, as well as work with local manufacturers to apply our technology.”
Since its inception in 2023, the Net Zero Challenge has brought global climate-tech innovations to Vietnam, seeking to fill a gap in early-stage climate funding while offering mentorship, market access and local partnerships to help startups scale their technologies and create tangible environmental impact.
Past winners include Canada’s CO2L Tech, a startup developing electrochemical systems to convert captured carbon dioxide into industrially useful chemicals; Australia’s Bygen, the creator of biodegradable antimicrobial coatings and packaging from upcycled food waste; and Singapore’s N&E Innovations, the producer of sustainable activated carbon from agricultural waste.
“Net Zero Challenge 2025 continues to be a powerful climate-tech platform to spotlight the next wave of bold and practical environmental innovations,” said Heng Li Lang, head of climate and liveability at Temasek Foundation.
“This reaffirms our commitment to building lasting partnerships with governments, businesses, investors and innovators to advance solutions that create impact for the people and planet,” she added.
Temasek Foundation is the philanthropic arm of Singapore investment company, Temasek Holdings. Besides Vietnam, it has launched similar climate-focused initiatives in Singapore and Indonesia, offering grants and support for recipients to scale their solutions for full commercialisation.
Vietnam’s first climate-tech fund
Touchstone Partners’ commitment to investing in climate-tech is bolstered by Vietnam’s favourable policy environment, including the country’s pledge to achieve carbon neutrality by 2050, plans for renewables to account for 25-30 per cent of the total energy supply by 2045, and green finance instruments introduced in the upcoming dual-city international financial centre in Da Nang and Ho Chi Minh City.
The new US$10 million Green Transition Fund builds on Touchstone’s US$50 million Fund I, which was launched in 2021 to invest in Vietnamese tech startups, particularly in hardware, deep tech and climate change mitigation.
“Our green portfolio has proven a high-impact, high-return investment thesis,” said Tu, adding that the new funding vehicle will provide seed capital, ranging from US$200,000 to US$1 million through instruments such as equity investments and convertible loans.
Over the past few years, the firm has backed climate-tech startups such as electric-bike maker Selex Motors, sand battery developer Alterno, rooftop solar solutions provider Stride, and aquaculture biotech firm Forte.
“The unique aspect of the new fund is that we will structure efficient blended financing models, helping investors de-risk while nurturing startups with non-dilutive grants and concessional financing,” she added.
Between 2023 and 2025, Touchstone’s portfolio companies in the sector have also attracted more than US$3 million in catalytic funding from international grant funders such as Temasek Foundation, P4G and the Global Green Growth Institute.
While climate tech equity investment in South-east Asia surpassed US$1 billion in 2022, total deal value has since declined, falling to US$465 million in 2024, reflecting a broader cooling of the venture capital market, indicated a report by DealStreetAsia.
In the first half of this year, just US$92 million was recorded across 34 deals, representing only 5.6 per cent of total startup funding in the region – markedly down from 11.6 per cent during the same period in 2024.
However, climate tech has accounted for a greater share of the total number of deals in South-east Asia, reaching 15.5 per cent in the first two quarters, from 13.1 per cent in the year-ahead period.
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