Amasia: Investing to Make the World Safer
The text below is the overview section of a longer internal report that elaborates on our thesis statement from 2019. We’ve continued to tinker with it and the nomenclature has changed as you can see on our thesis page. We’ve left this essay unchanged — the basic framework is the same.
At Amasia we invest in capital-efficient software companies that address global opportunities.
In 2019 we refined our strategy to incorporate research into the commercial possibilities that arise from finding solutions to global problems.
That research showed that the most serious global problems were environment- and climate-related. (See our prior writings on climate here.)
We are not alone in our assessment. Environmental threats occupied the top five spots in the World Economic Forum’s global risk survey.
No other category in the survey’s history has ever occupied all five of the top spots.
Our distilled investment thesis brings together several Amasia threads:
Our expertise in, and focus on, global themes
Our competence in investing in early-stage software companies
Our interest in climate and sustainability issues
Our belief that behavior change is the greatest enabler of environmental change
Which yields: Amasia invests in early-stage software companies that catalyze changes in behavior, to enhance sustainability and mitigate global climate impact.
We believe that changing people’s behavior, at the scale of billions of people making trillions of decisions differently, will have the greatest positive impact on the environment.
Four factors then contribute to “right now” being the suitable moment for an investment approach built around behavior change:
Awareness: The seriousness of global environmental threats has placed sustainability, climate risk, and other environmental considerations at the front of many people’s minds.
Access: Affordable new technologies have made it possible to share information, shape social attitudes, increase purchasing power, and influence decision-making at an unprecedented global scale.
Growth: By 2025, 1.8 billion more people are expected to join the consumer class due to rising disposable incomes and industrialization. The awareness and access mentioned above have resulted in a large and growing population of environmentally-minded and digitally-connected consumers.
Entrepreneurship: That population has inspired a wave of innovative entrepreneurship and a corresponding explosion in appealing investment opportunities.
The sectors we target are determined by the behavioral changes we target. The coherence of those sectors becomes visible only when viewed through the lens of behavior change.
This is unusual, and can sometimes require squinting to see the world the way we do.
An example of the cognitive dissonance that follows from radically different taxonomies such as ours can be found in Jorge Luis Borges’ Celestial Emporium of Benevolent Knowledge.
We have sorted modes of behavior change into four categories — we call them the 4 Rs for ease of reference:
R1 - Reduce and regenerate: Creating a sustainable world will require that we not only reduce emissions going forward, but also regenerate the biosphere from the harm we’ve already done. Here, we include companies enabling behaviors that do either, or both – everything from climate intelligence companies like Clarity and Joro to companies with more interventionist approaches such as regenerative agriculture and reforestation.
R2 - Reuse and recycle: The creation of virtually any physical product results in damage to our natural environment. Our focus here is on companies such as second-hand marketplaces such as Swappa (for used electronics) that help people and companies engage in sustainable behavior while saving money.
R3 - Replace bricks with bytes: Replacing physical structures with digital platforms helps reduce planetary damage. This category focuses on companies that provide those platforms—everything from online financial institutions like Wealthfront to remote work companies such as Dialpad to remote learning platforms such as Skillshare.
R4 - Rationalize resources: Global supply chains, for almost any physical good, are massively overbuilt because of the relentless focus on consumer convenience. This category focuses on companies that help supply chains become more efficient and reduce waste, such as Nusantara/Super, which streamlines e-commerce logistics and Treedots, which reduces food waste.
Within each of the categories above, we have identified a series of solutions that tie to product or service offerings.
Our approach is inspired by, but very different from, Project Drawdown. While our schema is built entirely around behavior change, we are deeply grateful for the inspiration.