Home to 85% of the global population and the major share of economic growth in the coming decades, these nations will make or break our chances of achieving the Paris Climate Agreement.

The challenge is immense, but so is the potential. As developing countries rapidly urbanize and industrialize, the decisions they make today about how to power their economies will reverberate for generations.

Will they lock in decades of high-carbon infrastructure, or leapfrog to cleaner, greener models? The answer depends, in large part, on whether climate tech solutions can be deployed at the pace and scale needed in these markets. And while many of the same obstacles exist as in developed economies - from policy barriers to lack of risk capital - emerging markets face a unique set of challenges and opportunities.

Gaps and opportunities in emerging markets

Take funding, for example. A recent analysis found that emerging markets accounted for just 15% of global climate tech investment in 2023, despite being home to 65% of the world's population. "The funding gap is real, but so is the opportunity to build lean, high-impact models," notes Josef Werker, CEO of Philippines-based Humble Sustainability.

By helping businesses resell their old IT equipment instead of discarding it, Humble Sustainability has diverted over 250,000 kg of e-waste from landfills while generating revenue for clients. The company recently announced an additional funding round led by Asia-focused venture capital firm Gobi Partners, with participation from several high-profile investors. "There's huge untapped potential in the circular economy, especially in emerging markets. We're just scratching the surface."

Entrepreneurs in emerging markets are rising to the challenge, developing innovative solutions that are tailored to local contexts and designed to scale. By leveraging their deep understanding of on-the-ground realities, these startups are finding ways to drive impact despite the constraints they face.

Take BANIQL for example, an Indonesian startup that recently secured $1.6 million in seed funding to revolutionize sustainable nickel and cobalt extraction for batteries. As the world transitions towards cleaner energy solutions, the demand for these critical minerals is skyrocketing. BANIQL's groundbreaking technology aims to make the extraction process more sustainable and environmentally friendly.

"The world needs more nickel and cobalt, but the way we currently extract these minerals is taking a massive toll on the environment, especially in emerging markets," says Willy Halim, CEO and Co-founder of BANIQL. "We saw an opportunity to do things differently - to develop a smarter, cleaner approach that's tailored to the unique challenges and opportunities of these regions. It's not just about meeting demand; it's about driving the transition to a more sustainable future and showing that green growth is possible."

With Indonesia holding 25% of the world's nickel reserves, BANIQL is strategically positioned to make a significant impact. The company is also working to penetrate the South Korean, Australian, and Philippine markets. By developing solutions tailored to the specific needs and challenges of these regions, startups like BANIQL are accelerating the transition to a more sustainable future in ways that are adapted to local contexts.

Collaboration is key

But entrepreneurs can't do it alone. Unlocking the full potential of climate tech in emerging markets will require a collaborative, cross-sectoral effort. Corporations must become early adopters and scaling partners for climate innovations. Governments must create enabling policies and financial incentives, from carbon pricing to R&D funding. And philanthropists must pony up catalytic capital to crowd in private investment at scale.

In Thailand, for example, Seedstars and The Incubation Network teamed up to create the Waste Management & Recycling Academy which brought together all these stakeholders to equip entrepreneurs tackling plastic pollution with the skills and connections to scale their models. Over nine months, the program helped a cohort of startups pilot their solutions, from bioplastic recycling to reverse vending machines. Key to their progress was the combination of targeted workshops, one-on-one coaching, and real-world testing.

"What we’ve seen is that a truly-tailored mentorship partnering can provide that cutting-edge boost that entrepreneurs need to refine their ideas in order to align more closely with needs of the market and its community," reflects Archie Moberly, Partnerships Manager at Seedstars. "To drive the growth of innovation in Thailand, it's important to shift the entrepreneurial mindset to think collaboratively about solutions, rather than competitively."

By leveraging a global community of partners, such programs are bridging critical gaps in the ecosystem - from technical assistance to market linkages to early-stage funding. The goal is to de-risk and catalyze a pipeline of high-impact ventures that can attract downstream investment and achieve meaningful scale.

Bridging the gaps in emerging markets

"The Global South is already bearing the brunt of climate impacts, but it also holds enormous potential for solutions," stresses Charlie Graham-Brown, General Partner at Seedstars International Ventures. "These are the markets where sustainable infrastructure is yet to be built, where billions of lives can be transformed. We have a chance to catalyze resilient, inclusive growth - but the clock is ticking."

Indeed, the stakes could not be higher. The decisions made in emerging markets today will shape the trajectory of global emissions for decades to come. As these economies grow and develop, there is a narrow window of opportunity to embed sustainability into the fabric of their societies.

The green gold rush is on, and emerging markets are the next frontier. Seizing this opportunity will require innovation, collaboration, and a shared sense of urgency. But if we get it right, the prize is immense - a trillion-dollar market opportunity and a livable planet for generations to come.

This is our decisive decade. The decisions we make today will ripple through the rest of the century. Time to roll up our sleeves and get to work. The future of our planet depends on it.

Are you an entrepreneur, investor, or organization working to accelerate climate innovation in emerging markets? Seedstars wants to hear from you. Visit seedstars.com to learn more about our programs and partnership opportunities, and join us in building a greener, more resilient future for all.