Renewable Energy: Southeast Asia

Renewable energy in Southeast Asia is a growing sector with a market size of $205 billion and capital investments totaling $11 billion between 2020 and 2022. The region is committed to renewable energy and integrating sustainable practices into legacy industries.

This report provides an overview of the renewable energy market in the Southeast Asia region, including a market breakdown, capital market analysis, and transaction analysis.

Renewable Energy in Southeast Asia: Market Breakdown

• Renewable energy in Southeast Asia is a $205 billion industry with a forecasted compound annual growth rate (CAGR) of 7% between 2022 and 2027.
• Southeast Asia has invested $2.7 billion into the renewable energy sector, with a deal count of 60 in 2022 alone, highlighting the rapid development of renewable energy in the region.

Renewable Energy in Southeast Asia: Capital Market Analysis

• Renewable energy companies in Southeast Asia have received significant capital, totaling $10.69 billion since 2020 across 236 deals with an average deal size of $45 million.
• Capital deployed grew significantly through 2021 but slowed considerably in 2022 due to a combination of a lower deal count and a smaller average deal size.

• Mergers and acquisitions had the most significant capital investment in the renewable energy sector of about 46%, or $4.9 billion, since 2020, suggesting that considerable market consolidation is occurring within the industry.
• Capital investments of 24%, or about $2.6 billion, in other deal types, such as secondary transactions in the sector, further highlight the high level of consolidation in the market.
• Capital deployed in private equity transactions, $1.5 billion or 14% of all capital deployed, and venture capital transactions at 5%, or $535 million, showcases the fundraising opportunities for early-stage renewable energy companies and the growth potential of the sector.

• Singapore has the most significant capital investment in renewable energy companies, totaling 52%, or $6 billion, since 2020, signifying their commitment toward sustainability and net zero carbon emissions.
• The Philippines, as an emerging nation, has contributed 30%, or $3 billion, in the sector.
• Emerging nations, such as Malaysia, Thailand, Indonesia, and Laos, have additionally conducted notable investments over the same period. The investment highlights the desire for growth in the renewable energy sector from all countries in the region.

The Company

Sun Energy provides its clients with environmentally friendly solar panels. Moreover, the corporation supports its clients by offering financial, market development, and rental services for solar panels with the intent to change the world through renewable energy positively.

Most Recent Financing Status

• Sun Energy raised $25 million of Series A venture funding in a deal on November 22, 2021.
• The round was led by PT Delta Dunia Makmur and TBS Energy Utama.
• The funding will enable the company to develop more solar PV projects, cement its market position in Indonesia, and bolster further growth in the Asia-Pacific region.

Southeast Asia’s renewable energy sector is filled with firms that work together with the objective of sustainability and creating a positive change for a better world free of climate change. Many countries in Southeast Asia, including emerging nations, have proven to be committed to sustainability through investments placed into renewable energy, demonstrating their desire for this sector to grow.

Sources: Pitchbook Data, Inc.

Renewable Energy: Lithium Batteries

Over $100 billion has been invested into the lithium batteries sector since 2020. Global trends towards renewable energy have driven the growth of the sector. Forecasts indicate that the sector will grow at a compounded annual growth rate (CAGR) of 13% from 2022 to 2031, making this one of the fastest-growing energy sectors. Chinese companies have received over 50% of capital deployed within the sector showing the appetite for growth and geopolitical importance of the sector.
This report provides a capital market overview of the lithium batteries sector and capital investments according to region or deal types, in addition to how much firms have increased their capital investments as well as announced deals between 2020 and 2022.

Lithium Batteries: Market Breakdown

• The lithium battery industry is a $48 billion industry with a five-year compound annual growth rate of 23%.
• Lithium batteries can be used to power electric vehicles, households, personal electronics, and as a power backup storage. The technology allows lithium batteries greater energy storage because of the smaller and denser chemical structure. Of the energy stored in lithium-ion batteries, 95% is available for use, whereas lead acid batteries have 10% less voltage capacity.
• Storage is important in renewable energies because it ensures there is always an availability of electricity. Batteries allow for energy to be stored during peak generation hours and used during off periods.

Lithium Batteries: Capital Market Analysis

• Lithium battery companies have received notable capital deployment since 2020, with a total of $109 billion invested in the sector.
• Capital invested per quarter has been increasing despite lower deal count, indicating that larger transactions are occurring in the market. This shows that the lithium battery sector is maturing and capable of raising large investments.
• In Q2 of 2022, lithium battery companies raised a total of $15 billion across 127 deals with an average deal size of $12 million.
• In Q4 of 2021, 145 deals were made with a total of $15 billion averaging each deal at $10 million; therefore, it can be assumed that the end of Q4 in 2022 would also have high capital investments.

• Chinese lithium battery companies experienced the largest capital invested within the sector and raised a total of 54%, or $59 billion, since 2020.
• Lithium battery companies from North America had the second largest capital investment in the sector with 24%, or $26 billion, since 2020.
• Companies from other Asia countries such as Japan, India, and South Korea have also received notable capital deployment with a total of 11% of all funding in the sector.

• IPOs (initial public offerings) and PIPEs (private investments into public enterprises) have the largest capital invested in the lithium battery sector at 36%, or $39 billion, since 2022, which indicates that the sector is maturing and large deals are occurring.
• Mergers and acquisition deal types have the second largest capital investments with a value of 28%, or $31 billion, indicating high levels of consolidation in the market.
• Private equity at 21%, or $23 billion, and venture capital at 6% indicates that although deal types are bigger in the private equity sector, venture capitals still consist of deals as well suggesting the vast size of the lithium battery sector.

The Company

Redwood Materials is a USA-based private company that is a developer of sustainable battery recycling technology. Redwood technology specializes in recycling and commercializing batteries and creating a sustainable solution. Redwood’s technology facilitates waste to be processed and converted into battery cells. These cells can then be implemented in consumer electronics.

Most Recent Financing Status

• Redwood Materials raised $776 million based on a pre-money valuation at $3 billion of Series C venture funding in a deal on August 18, 2021.
• The round was led by T. Rowe Price. Eleven other strategic and financial investors participated in the round including Ford, Amazon, Goldman Sachs Asset Management, and Fidelity Investments.
• The funds will be used to expand the existing operations internationally and throughout North America.

The lithium batteries sector is critical for the future of the renewable energy market. The growth in demand for electric vehicles and household use of renewable energy has resulted in an expansion within the lithium battery sector, and a CAGR of 22%. Lithium batteries will continue to increase in popularity as the world shifts to more renewable energy. J&A forecast that the growth trends and investment in the sector will increase over the next decade making this a pivotal, high-growth industry.

Sources: Pitchbook Data, Inc.

Renewable Energy: Market Overview

Renewable energy is a rising sector and firms within the industry have experienced a 233% increase in capital raised between 2011 and 2021. With the continued focus on combating climate change and the transition to renewable energy, firms in the sector will continue to rise in importance within global capital markets.
This report provides a market overview of renewable energy from 2010 – 2022 and market size based on region and type of clean energy in 2020.

Renewable Energy

• The renewable energy sector may be placed into 4 key sectors; solar energy, wind energy, fuel cells and batteries.
• Wind energy is divided into two sections, onshore and offshore energy this is generated through wind turbines. Onshore wind achieved the largest market size in the renewable energy sector in 2020. The total market size was estimated at $51 billion. The offshore wind is another major industry within renewable energy with a market industry is approximately $14 billion.
• Solar energy involves the conversion of light into energy and involves photovoltaic panels. Solar energy is the second largest market within the sector with an estimated value of $31 billion.
• Batteries are a source of electrical power that stores and converts chemical energy to electrical energy. Batteries are a rapidly growing segment of the renewable energy market with a global estimated market value of $26 billion in 2020.
• Fuel cells help store electricity that is produced by renewable sources such as solar energy, onshore or offshore wind, and other renewable energy technologies.

• The battery segment is forecast to have the highest market size for clean energy technologies with $123 billion in 2030 and $169 billion in 2050, with $123 billion in 2030 and $169 billion in 2050. The market increase between the years 2030 and 2050 for batteries is forecast to be 37%.
• The onshore wind segment is forecasting significant growth between 2030 and 2050. The sector is expected to increase by 37% while offshore wind is forecast to decreasing by around 8%.

Renewable Energy: Market Breakdown

• Renewable energy experienced an increase in capital market activity in 2021 with $429 billion invested across the sector. A total of 7,863 transactions occurred in the sector with an average deal size of approximately $54 million.
• 2022’s data refers to the first 9 months of the year and 4,654 deals have been conducted with a total of $265 billion invested.
• The trend shows that investments in renewable energy capital market deals are rising, hence, suggesting an increase in investments more into this sector.

• Renewable energy firms from the USA have received the largest capital in the first three quarters of 2022 with 35% invested into the sector.
• Europe received the second largest capital deployment in the sector with renewable energy firms on the continent raising 34% of capital invested in the sector.
• Asian, Canadian, and Middle Eastern renewable energy companies have received 16%, 4% and 3% of capital in the sector in 2022 respectively.

• In 2022 the Asia Pacific region shows a market size of $62 billion dollars conveying that they have the largest market size for clean energy.
• Asia is seen to have the largest market size for clean energy due to the large value made toward the sector compared to other regions.
• Europe’s market size is USD33 billion making their value about half of Asia’s which emphasizes the high market size of clean energy investments in Asia.

• In 2030 and 2050 Asia Pacific is still estimated to hold the highest market share for clean energy based on the stated policies scenario.
• Asia Pacific is predicted to increase by 36.6% in market size from USD142 billion in 2030 to USD194 billion in 2050.
• Moreover, Asia Pacific has the highest percentage increase compared to other regions’ 2030 and 2050 numbers.

Renewable energy is growing rapidly especially in Asia Pacific. According to forecasts, Asia Pacific is expected to invest the most money into renewable energy and driving growth within the sector. Onshore wind had the higher market size in 2020 but the emergence of lithium batteries will drive the renewable energy sector. J&A forecasts continued growth within the renewable energy sector.

Sources: Pitchbook Data, Inc., iea.org.

Capital Investments in Beauty and Cosmetics: Market Overview

The global cosmetic and beauty market is anticipated to grow to $416 billion in 2028 with a CAGR of 7%. Although the COVID-19 pandemic had a significant negative impact during 2019 and 2020 on the market, the rise in CAGR is attributable to a strong rebound in consumer demand. The market exhibited lower growth of -11% and contracted in 2020, but grew to $254 billion in 2021. This shows that the market has constant demand and is returning to the pre-pandemic level as the effects of the pandemic decrease.

In this report, J&A will analyze the international capital market activity conducted within the beauty and cosmetics market between 2020 and 2022.

Market Overview

The beauty and cosmetics industry are segmented into three major categories: skin care, hair care, and makeup.

• Skin care forms the largest segment of the cosmetics market with 34%. According to research, the average spend on skin care per person per year is over $1,200 USD in the USA.
• Hair care maintained a market position of 23%, mostly due to younger consumers. The hair care segment is expected to grow with a CAGR of 6%.
• The other segments of beauty and cosmetics include hygiene, oral care, and fragrance products with a combined 34% market share.

• In 2020, a focus on beauty and cosmetics (due to the global COVID-19 pandemic) led to a spike in deal flow in the sector, especially in the Q4 time period with $26 billion in capital investments and 390 deals. The total average deal size in 2020 was $174 million.
• In 2021 Q4 the largest deal was $29 billion, and a total of 430 deals were recorded.
• In 2021 the average deal size was recorded at $201 million, which shows that the average deal size has increased significantly compared to 2020 when it was recorded at $173 million.
• Between 2020 and 2022 Q2, 3,348 total deals deployed capital into the beauty and cosmetics market with $154 billion of capital deployed. The average deal size in the sector was $16 billion within that time frame.
• The periods with the largest amount of capital invested were 2021 Q4 and 2022 Q1, due to the significant market growth with the global COVID-19 pandemic.
• Jahani and Associates (J&A) anticipate that trend will continue to grow with notable increases in 2022 and forward.

• Europe is leading the capital invested with 37% of the total raise. The beauty and cosmetics market is growing in the European market mostly. The scalability of the e-commerce market combined with the global pandemic effect on social media directly affected beauty and cosmetics products.
• Asia has the second-largest capital investment with 33%. Additionally, China and Japan have the largest market size with $52 billion and $38 billion respectively. The technological research and developments in the specific market have grown respectively in the Asian region.
• Due to their high-end quality of the products, the Korean market has an important place in the global market. In 2019, the market size was estimated at $10 billion. Korea is one of the top 10 beauty markets in the world and has 3% of the global market.
• The USA holds 22% of the capital investments. The USA currently is the world’s largest beauty market, with about 20% share, followed by China at 13% and Japan at 8%.
• South America has 3% of the capital investments and the market holds significant growth.

There is considerable growth in the beauty and cosmetics sector and also in the capital market between 2020 Q4 and 2021 Q4. The development of new technologies in the beauty and cosmetics industry has disrupted the existing ecosystem, and technological innovations are projected to significantly impact market growth in the USA and Korean regions in the beauty and cosmetic sectors. The 14% growth in the global e-commerce market makes beauty and cosmetics products more attractive, and the market more scalable for investments. J&A predicts a continued increase in capital market activity within the beauty and cosmetics sector in Southeast Asia and North America as economies become more interconnected and companies expand into new international markets.

Sources: Pitchbook Data, Inc.

Global Vertical Farming Market

Vertical farming is an agricultural method to grow crops in vertically stacked layers. It incorporates controlled environment agriculture using soilless farming techniques, which provides better food quality with higher crop yields.

The COVID-19 pandemic and global geopolitical factors have impacted the food and agriculture sector, from supply chain disruption to shortage of food supplies. This has led many to adopt vertical farming technologies, to improve food security and increase farming capacity in urban and local environments. These major factors are contributing to the growth of this market, with a remarkable interest among investors to invest in vertical farms.

Overview of the Vertical Farming Industry

The global vertical farming industry is expected to grow from $3 billion in 2021 to $4 billion in 2022. Further, the market is forecast to grow at a compound annual growth rate (CAGR) of 26% to $21 billion by 2029. With the increase in population and the rise in demand for healthy and safe food, farmers are tending to use new methods and technologies in the agriculture industry, known as vertical farming. This report outlines announced investments made globally in vertical farm deals between 2017 and 2022.

Key Subsectors of the Vertical Farming Industry

Key Subsectors of the Vertical Farming Industry

1 – The Methodologies Of Vertical Farming

Vertical farming methodologies can be divided into hydroponics, aeroponics, and aquaponics based on the use of soil and water in the agricultural process. Farmers can have total control over a hydroponic system by using water more efficiently and improving the quality and taste of the produce. These and many other reasons are driving hydroponics to grow as a vertical farming methodology. Aeroponics leverages air to grow crops. Aquaponics is a method of growing plants and raising fish in water. Fish will feed the plants with their waste that converts into nitrates, and the plants will clean and filter the water before it returns to the fish tank.

2 – Structure Analysis

New and abandoned buildings are being used to deploy and develop vertical farms. Building-based vertical farms are growing across cities. For example, the NYC farming company Bowery Farming developed urban farms inside abandoned warehouses that provide fresh produce to local retailers and restaurants. The shipping container-based structure of vertical farming is projected to gain traction and growth in the coming years. These structures are used for developing indoor farms by controlling and monitoring all systems remotely from a computer or smartphone.

3 – Component Analysis

Various manufacturing components are used within vertical farming processes. LED lighting is becoming ideal for farms for its low operational cost and power consumption. This component, along with climate control, sensors, irrigations, and fertigation components, are driving the segment to grow rapidly and steadily.

Global Capital Market Activity Overview

• Between 2017 and 2022, $14 billion was deployed across a total of 1,520 vertical farming deals in the analyzed period with an average deal size of $9 million during this period.
• More than $660 million was deployed into 221 deals within the vertical farm sector in 2017, with an average deal size of $3 million.
• The COVID-19 pandemic boosted investments in the vertical farms market between 2020 and 2021. The most active year for vertical farming has been 2021, with $6 billion deployed across a total of 332 deal counts and an average deal size of $17 million.

Announced Vertical Farming Deal Counts

• Approximately 72% of deal counts were attributed to small deal sizes up to $5 million. This indicates the availability of a remarkable number of different start-ups and innovative technologies.
• The deal sizes ranging from $5 million to $25 million own 18% of the total deal count. Compared to small deal sizes, these growth-stage companies indicate that there are many start-ups doing well in the market and gaining traction.
• The lowest share of deal count goes to over $25 million deal sizes. This shows that the market is still fragmented with relatively few mature players.

• The USA is leading the majority of deal counts in the vertical farming market with a 48% share of the global deal counts. This indicates the high presence of many vertical farms across the USA and the adoption of new technologies. The legalization of cannabis in the USA has also helped in the growth of the vertical farming market.
• Europe holds second place for the highest deal count with 29% of the global count. This region is projected to drive the development of vertical farms in the upcoming years.

With the increase in population and the shift in the global food market to healthier and safer products, farmers are adopting new technologies and farming methods. In contrast to the traditional agriculture methods, these new methods known as vertical farming are a game-changer for the agriculture technology industry. The rise of this global trend is leading to a continuous spike in interest among investors like venture capitalist firms to invest in vertical farms and drive the markets’ growth in the upcoming years.

Sources: Pitchbook Data.

International Investments in Health and Wellness

Capital market activity within the health and wellness market has expanded by 633% from 2020 Q1 to 2022 Q1. The health and wellness industry includes all activities that promote physical and mental wellbeing, from yoga to healthy eating, personal care and beauty, nutrition and weight loss, meditation, spa retreats, workplace wellness, and wellness tourism. The market has experienced rapid growth since the global COVID-19 pandemic in 2020, highlighting the importance of mental, spiritual, and physical well-being.

The pandemic also highlighted the significance of good living behaviors like improved nutrition, going to the gym, practicing yoga, and stress reduction. The healthy eating, nutrition, and weight reduction market is the second largest, accounting for almost 20% of total revenue. Furthermore, the health and wellness industry have the greatest worldwide expansion potential. Given these considerations, the health and wellness industry appear to be the most promising investment opportunity throughout the forecasted period.
In this report, J&A analyzes the international capital market activity conducted within the health and wellness market between 2011 and 2022.

Overview of the Health and Wellness Market

• The medical technology sector experienced the greatest capital deployment within the health and wellness sector of over $13 billion in the period. This shows the importance of the industry and raises the demand for tailored industries in the health sector.
• The applications software development sector received the second-largest capital deployment, with $9 billion.
• Care services had a significant percentage of capital raised during this period, with $7 billion. This indicates the constant growth of the mental health sector in the forecasted time.

Health and Wellness Industry Market Trends

1 – Clean and Healthy Eating

Consumers are more concerned with living longer and better lives. Consumer preferences have evolved toward eating more natural, organic food that is free of additives and preservatives. Today, eating clean is directly related to a gluten-free, dairy-free, non-refined carbohydrate, and sugar-free diet. The global gluten-free retail sector is expected to increase at a 9% annual rate from 2017 to $12 billion by 2024.

2 – Increasing Demand for Wellness Tourism

Wellness vacations account for 17% of total tourism spending. Increasingly travelers are visiting the Asia-Pacific region, Latin America and the Caribbean, the Middle East, and Africa to get in shape and return home calm and collected. The wellness tourism market is worth $639 billion and growing at a 7% annual rate from 2015 to 2017. Wellness travel is expanding twice as fast as the total tourism growth rate of 3%.

3 – Personalized Technology of Health and Wellness

Smart watches, health and fitness trackers, heart rate monitors, apps that help users’ emotional and mental health, and virtual assistants have all seen an increase in popularity. Wearable technologies are expected to help people live 70% longer, maintain a 63% more healthy life, and pay 62% less in insurance premiums. By 2022, the wearables market is estimated to reach $27 billion.

Announced Health and Wellness Investments Since 2020

• Between 2020 and 2022, 3,000 investors deployed capital into the health and wellness market. In that time frame, 4,000 deals were deployed by 4,206 investors in the health and wellness sector.
• In 2020, a focus on health and wellness (due to the global COVID-19 pandemic) led to a spike in deal flow in the sector. The largest deal was calculated at $17 billion, with a total of $146 billion in capital invested.
• Jahani and Associates (J&A) anticipate that trend will continue to grow with notable increases in 2022 and forward.

Announced Health and Wellness Capital Markets Deals

• The USA is leading the capital raising with 72% of the total raise. Additionally, the USA has the largest market size in the health and wellness industry at $53 billion in value.
• Brazil has the second-largest capital raise share, with 8% and Sweden holds the third-largest capital raise share, with 3%. In general, Southeast Asia, the Middle East, Europe, the Gulf Cooperation Council, and Australia are experiencing increasing volume in their capital markets.

• 48% of capital raised within the sector was deployed into privately held entities, which shows the growth potential of the market and the emergence of new competitors in the sector.
• An additional 13% of deals done within the health and wellness industry were PIPE, private placements into publicly enterprises, and transactions.
• In the health and wellness sector, 33% of capital deployed was put into mergers and acquisitions. This indicates that there are large firms that are interested in market consolidation.
• Less than 1% of capital deployed in the sector was done through IPOs, which shows a lack of maturity within the sector.

Investor Spotlight: Shore Capital Partners

The Company

Shore Capital Partners is a private equity firm based in Chicago, Illinois, founded in 2009. The firm prefers to invest in growth-stage companies through buyouts and seeks to invest in business products, business services, consumer products, consumer services, materials, resources, healthcare, life sciences, oncology, manufacturing, and technology-based sectors in North America.

Website: www.shorecp.com

The health and wellness industry globally has moved its portfolio towards mindfulness and personal care health and well-being. Health and fitness companies in North America dominate capital markets and have raised significantly more capital than the Middle East, Southeast Asian, and European competitors. J&A predicts a continued increase in capital market activity within the sportswear sector as economies become more interconnected and companies expand into new international markets.

Sources: PitchBook, UL, Forbes, CbInsights, Medium, PolicyAdvice, McKinsey.