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Bill Gates: Rich nations should shift entirely to synthetic beef

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In his new book, How to Avoid a Climate Disaster, Bill Gates lays out what it will really take to eliminate the greenhouse-gas emissions driving climate change.

The Microsoft cofounder, who is now cochair of the Bill and Melinda Gates Foundation and chair of the investment fund Breakthrough Energy Ventures, sticks to his past argument that we’ll need numerous energy breakthroughs to have any hope of cleaning up all parts of the economy and the poorest parts of the world. The bulk of the book surveys the technologies needed to slash emissions in “hard to solve” sectors like steel, cement, and agriculture.

He stresses that innovation will make it cheaper and more politically feasible for every nation to cut or prevent emissions. But Gates also answers some of the criticisms that his climate prescriptions have been overly focused on “energy miracles” at the expensive of aggressive government policies.

The closing chapters of the book lay out long lists of ways that nations could accelerate the shift, including high carbon prices, clean electricity standards, clean fuel standards, and far more funding for research and development. Gates calls for governments to quintuple their annual investments in clean tech, which would add up to $35 billion in the US.

Gates describes himself as an optimist, but it’s a constrained type of optimism. He dedicates an entire chapter to describing just how hard a problem climate change is to address. And while he consistently says we can develop the necessary technology and we can avoid a disaster; it’s less clear how hopeful he is that we will.

I spoke to Gates in December about his new book, the limits of his optimism, and how his thinking on climate change has evolved.

Gates is an investor either personally or through Breakthrough Energy Ventures in several of the companies he mentions below, including Beyond Meats, Carbon Engineering, Impossible Foods, Memphis Meats, and Pivot Bio. This interview has been edited for space and clarity.

Q: In the past, it seemed you would distance yourself from the policy side of climate change, which had led to some criticisms that you are overly focused on innovation. Was there a shift in your thinking, or was it a deliberate choice to lay out the policy side in your book?

A: No, that’s absolutely fair. In general, if you can do innovation without having to get involved in the political issues, I always prefer that. It’s more natural for me to find a great scientist and back multiple approaches.

But the reason I smile when you say it is because in our global health work, there’s a whole decade where I’m recognizing that to have the impact we want, we’re going to have to work with both the donor governments in a very deep way and the recipient governments that actually create these primary health-care systems.

And my naïve view at the beginning had been “Hey, I’ll just create a malaria vaccine and other people will worry about getting that out into the field.” That clearly wasn’t a good idea. I realized that for a lot of these diseases, including diarrhea and pneumonia, there actually were vaccines. And it was more of a political challenge in getting the marginal pricing and the funds raised and the vaccine coverage up, not the scientific piece.

Here, there’s no doubt you need to get government policy in a huge way. Take things like clean steel: it doesn’t have other benefits. There’s no market demand for clean steel. Even carbon taxes at low costs per ton aren’t enough to get clean steel on the learning curve. You need like a $300-a-ton type of carbon tax. And so to get that sector going, you need to do some basic R&D, and you need to actually start having purchase requirements or funds set aside to pay that premium, both from government and perhaps companies and individuals as well.

But, you know, we need a lot of countries, not just a few, to engage in this.

Q: How do you feel about our chances of making real political progress, particularly in in the US, in the moment we find ourselves in?

A: I am optimistic. Biden being elected is a good thing. Even more encouraging is that if you poll young voters, millennials, both who identify as Republican and Democrats, the interest in this issue is very high. And they’re the ones who will be alive when the world either is massively suffering from these problems or is not, depending on what gets done. So there is political will.

But there’s a lot of interplay [between politics and innovation]. If you try and do this with brute force, just paying the current premiums for clean technology, the economic cost is gigantic and the economic displacement is gigantic. And so I don’t believe that even a rich country will do this by brute force.

But in the near term, you may be able to get tens of billions of dollars for the innovation agenda. Republicans often like innovation.

I’m asking for something that’s like the size of the National Institutes of Health budget. I feel [it’s politically feasible] because it creates high-paying jobs and because it answers the question of—well, if the US gets rid of its 14% [of global emissions], big deal: what about the growing percent that comes from India as it’s providing basic capabilities to its citizens?

I just imagine a phone call to the Indians in 2050 where you say, Please, please, build half as much shelter because of the green premium [for clean cement and steel]. And they’re like, What? We didn’t cause these emissions.

Innovation is the only way to [reduce those price premiums].

Q: You’ve said a couple of times you’re optimistic, and that’s sort of famously your position on these things. But of course, optimism is a relative term. Do you think we can realistically hold warming to or below a 2 °C increase at this point?

A: That would require us to get the policy right, to get many, many countries involved, and to be lucky on quite a few of the technological advances. That’s pretty much a best case. Anything better than that is not at all realistic, and there are days when even that doesn’t seem realistic.

It’s not out of the question, but it requires awfully good progress. Even something like, do we get [an energy] storage miracle or not? We can’t make ourselves dependent on that. Batteries today can’t, within a factor of 20, store for the seasonal variation that you get [from intermittent sources like wind and solar]. We just don’t make enough batteries; it would be way too expensive. So we have to have other paths—like fission or fusion—that can give us that reliable source of electricity, which we’ll be even more dependent on than ever.

impossible burger

IMPOSSIBLE FOODS

Q: In the book you cover a broad array of hard-to-solve sectors. The one I still have the hardest time with, in terms of fully addressing it, is food. The scale is massive. We’ve barely begun. We fundamentally don’t have replacements that completely eliminate the highly potent emissions from burping livestock and fertilizer. How hopeful are you about agriculture?

A: There are [companies], including one in the [Breakthrough Energy Ventures] portfolio called Pivot Bio, that significantly reduce the amount of fertilizer you need. There are advances in seeds, including seeds that do what legumes do: that is, they’re able to [convert nitrogen in the soil into compounds that plants can use] biologically. But the ability to improve photosynthesis and to improve nitrogen fixation is one of the most underinvested things.

In terms of livestock, it’s very difficult. There are all the things where they feed them different food, like there’s this one compound that gives you a 20% reduction [in methane emissions]. But sadly, those bacteria [in their digestive system that produce methane] are a necessary part of breaking down the grass. And so I don’t know if there’ll be some natural approach there. I’m afraid the synthetic [protein alternatives like plant-based burgers] will be required for at least the beef thing.

Now the people like Memphis Meats who do it at a cellular level—I don’t know that that will ever be economical. But Impossible and Beyond have a road map, a quality road map and a cost road map, that makes them totally competitive.

As for scale today, they don’t represent 1% of the meat in the world, but they’re on their way. And Breakthrough Energy has four different investments in this space for making the ingredients very efficiently. So yeah, this is the one area where my optimism five years ago would have made this, steel, and cement the three hardest.

Now I’ve said I can actually see a path. But you’re right that saying to people, “You can’t have cows anymore”—talk about a politically unpopular approach to things.

Q: Do you think plant-based and lab-grown meats could be the full solution to the protein problem globally, even in poor nations? Or do you think it’s going to be some fraction because of the things you’re talking about, the cultural love of a hamburger and the way livestock is so central to economies around the world?

A: For Africa and other poor countries, we’ll have to use animal genetics to dramatically raise the amount of beef per emissions for them. Weirdly, the US livestock, because they’re so productive, the emissions per pound of beef are dramatically less than emissions per pound in Africa. And as part of the [Bill and Melinda Gates] Foundation’s work, we’re taking the benefit of the African livestock, which means they can survive in heat, and crossing in the monstrous productivity both on the meat side and the milk side of the elite US beef lines.

So no, I don’t think the poorest 80 countries will be eating synthetic meat. I do think all rich countries should move to 100% synthetic beef. You can get used to the taste difference, and the claim is they’re going to make it taste even better over time. Eventually, that green premium is modest enough that you can sort of change the [behavior of] people or use regulation to totally shift the demand.

So for meat in the middle-income-and-above countries, I do think it’s possible. But it’s one of those ones where, wow, you have to track it every year and see, and the politics [are challenging]. There are all these bills that say it’s got to be called, basically, lab garbage to be sold. They don’t want us to use the beef label.

Q: You talk a lot in the book about the importance of carbon-removal technologies, like direct air capture. You also did come out and say that planting trees as a climate solution is overblown. What’s your reaction to things like the Trillion Trees Initiative and the large number of corporations announcing plans to achieve negative emissions at least in part through reforestation and offsets?

A: [To offset] my own emissions, I’ve bought clean aviation fuel. I’ve paid to replace natural-gas heating in low-income housing projects with electric heat pumps—where I pay the capital cost premium and they get the benefit of the lower monthly bill. And I’ve sent money to Climeworks [a Switzerland-based company that removes carbon dioxide from the air and stores it permanently underground].

For the carbon emissions I’ve done—and I’ve gotten rid of more than what I emit—it comes out to $400 a ton.

Any of these schemes that claim to remove carbon for $5, $15, $30 a ton? Just look at it.

The idea that there are all these places where there’s plenty of good soil and plenty of good water and just accidentally, the trees didn’t grow there—and if you plant a tree there, it’s going to be there for thousands of years—[is wrong].

The lack of validity for most of that tree planting is one of those things where this movement is not an honest movement yet. It doesn’t know how to measure truth yet. There are all sorts of hokey things that allow people to use their PR budgets to buy virtue but aren’t really having the impact. And we’ll get smarter over time about what is a real offset.

UNSPLASH

So no, most of those offset things don’t stand up. The offset thing that we think will stand up is if you gather money from companies and consumers to bootstrap the market for clean steel and clean cement. Because of the learning-curve benefits there, putting your money into that, instead of on tree planting, is catalytic in nature and will make a contribution. We need some mix of government, company, and individual money to drive those markets.

Q: I do have to ask this: Microsoft is in the process of trying to eliminate its entire historic emissions, and there was a Bloomberg article that had a figure in there that I was a little surprised by. The company apparently wants to do it at $20 a ton? Do you think we can achieve reliable permanent carbon removal for $20 a ton eventually?

A: Very unlikely.

I mean, if you’d asked me 10 years ago how cheap solar panels would become, I would have been wrong. That went further than anyone expected.

Science is mysterious, and saying that science can do X or can’t do X is kind of a fool’s game. In many cases, it’s done things that no one would have predicted.

But even the liquid process, which is Carbon Engineering’s approach, will have a very tough time getting to $100 a ton.

With all these things, you have capital costs and you have energy costs. So getting to $20 a ton is very unlikely. There are a lot of current offset programs that claim they’re doing that, and that needs a lot of auditing because to eliminate carbon, you have to keep it out of the atmosphere for the full 10,000-year half-life. Most people have a hard time economically costing out 10,000 years of costs. Believe me, these tree guys make sure that if it burns down, they find another magic place where no tree has ever grown, to replant.

But it’s not to say that there aren’t a few places you can plant trees, or that a few of these offset things will work, like plugging certain methane leaks—that’s a high payback. We should use regulations; we should go fund those things.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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An AI is training counselors to deal with teens in crisis

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Counselors volunteering at the Trevor Project need to be prepared for their first conversation with an LGBTQ teen who may be thinking about suicide. So first, they practice. One of the ways they do it is by talking to fictional personas like “Riley,” a 16-year-old from North Carolina who is feeling a bit down and depressed. With a team member playing Riley’s part, trainees can drill into what’s happening: they can uncover that the teen is anxious about coming out to family, recently told friends and it didn’t go well, and has experienced suicidal thoughts before, if not at the moment.

Now, though, Riley isn’t being played by a Trevor Project employee but is instead being powered by AI.

Just like the original persona, this version of Riley—trained on thousands of past transcripts of role-plays between counselors and the organization’s staff—still needs to be coaxed a bit to open up, laying out a situation that can test what trainees have learned about the best ways to help LGBTQ teens. 

Counselors aren’t supposed to pressure Riley to come out. The goal, instead, is to validate Riley’s feelings and, if needed, help develop a plan for staying safe. 

Crisis hotlines and chat services make them a fundamental promise: reach out, and we’ll connect you with a real human who can help. But the need can outpace the capacity of even the most successful services. The Trevor Project believes that 1.8 million LGBTQ youth in America seriously consider suicide each year. The existing 600 counselors for its chat-based services can’t handle that need. That’s why the group—like an increasing number of mental health organizations—turned to AI-powered tools to help meet demand. It’s a development that makes a lot of sense, while simultaneously raising questions about how well current AI technology can perform in situations where the lives of vulnerable people are at stake. 

Taking risks—and assessing them

The Trevor Project believes it understands this balance—and stresses what Riley doesn’t do. 

“We didn’t set out to and are not setting out to design an AI system that will take the place of a counselor, or that will directly interact with a person who might be in crisis,” says Dan Fichter, the organization’s head of AI and engineering. This human connection is important in all mental health services, but it might be especially important for the people the Trevor Project serves. According to the organization’s own research in 2019, LGBTQ youth with at least one accepting adult in their life were 40% less likely to report a suicide attempt in the previous year. 

The AI-powered training role-play, called the crisis contact simulator and supported by money and engineering help from Google, is the second project the organization has developed this way: it also uses a machine-learning algorithm to help determine who’s at highest risk of danger. (It trialed several other approaches, including many that didn’t use AI, but the algorithm simply gave the most accurate predictions for who was experiencing the most urgent need.)

AI-powered risk assessment isn’t new to suicide prevention services: the Department of Veterans Affairs also uses machine learning to identify at-risk veterans in its clinical practices, as the New York Times reported late last year. 

Opinions vary on the usefulness, accuracy, and risk of using AI in this way. In specific environments, AI can be more accurate than humans in assessing people’s suicide risk, argues Thomas Joiner, a psychology professor at Florida State University who studies suicidal behavior. In the real world, with more variables, AI seems to perform about as well as humans. What it can do, however, is assess more people at a faster rate. 

Thus, it’s best used to help human counselors, not replace them. The Trevor Project still relies on humans to perform full risk assessments on young people who use its services. And after counselors finish their role-plays with Riley, those transcripts are reviewed by a human. 

How the system works

The crisis contact simulator was developed because doing role-plays takes up a lot of staff time and is limited to normal working hours, even though a majority of counselors plan on volunteering during night and weekend shifts. But even if the aim was to train more counselors faster, and better accommodate volunteer schedules, efficiency wasn’t the only ambition. The developers still wanted the role-play to feel natural, and for the chatbot to nimbly adapt to a volunteers’ mistakes. Natural-language-processing algorithms, which had recently gotten really good at mimicking human conversations, seemed like a good fit for the challenge. After testing two options, the Trevor Project settled on OpenAI’s GPT-2 algorithm.

The chatbot uses GPT-2 for its baseline conversational abilities. That model is trained on 45 million pages from the web, which teaches it the basic structure and grammar of the English language. The Trevor Project then trained it further on all the transcripts of previous Riley role-play conversations, which gave the bot the materials it needed to mimic the persona.

Throughout the development process, the team was surprised by how well the chatbot performed. There is no database storing details of Riley’s bio, yet the chatbot stayed consistent because every transcript reflects the same storyline.

But there are also trade-offs to using AI, especially in sensitive contexts with vulnerable communities. GPT-2, and other natural-language algorithms like it, are known to embed deeply racist, sexist, and homophobic ideas. More than one chatbot has been led disastrously astray this way, the most recent being a South Korean chatbot called Lee Luda that had the persona of a 20-year-old university student. After quickly gaining popularity and interacting with more and more users, it began using slurs to describe the queer and disabled communities.

The Trevor Project is aware of this and designed ways to limit the potential for trouble. While Lee Luda was meant to converse with users about anything, Riley is very narrowly focused. Volunteers won’t deviate too far from the conversations it has been trained on, which minimizes the chances of unpredictable behavior.

This also makes it easier to comprehensively test the chatbot, which the Trevor Project says it is doing. “These use cases that are highly specialized and well-defined, and designed inclusively, don’t pose a very high risk,” says Nenad Tomasev, a researcher at DeepMind.

Human to human

This isn’t the first time the mental health field has tried to tap into AI’s potential to provide inclusive, ethical assistance without hurting the people it’s designed to help. Researchers have developed promising ways of detecting depression from a combination of visual and auditory signals. Therapy “bots,” while not equivalent to a human professional, are being pitched as alternatives for those who can’t access a therapist or are uncomfortable  confiding in a person. 

Each of these developments, and others like it, require thinking about how much agency AI tools should have when it comes to treating vulnerable people. And the consensus seems to be that at this point the technology isn’t really suited to replacing human help. 

Still, Joiner, the psychology professor, says this could change over time. While replacing human counselors with AI copies is currently a bad idea, “that doesn’t mean that it’s a constraint that’s permanent,” he says. People, “have artificial friendships and relationships” with AI services already. As long as people aren’t being tricked into thinking they are having a discussion with a human when they are talking to an AI, he says, it could be a possibility down the line. 

In the meantime, Riley will never face the youths who actually text in to the Trevor Project: it will only ever serve as a training tool for volunteers. “The human-to-human connection between our counselors and the people who reach out to us is essential to everything that we do,” says Kendra Gaunt, the group’s data and AI product lead. “I think that makes us really unique, and something that I don’t think any of us want to replace or change.”

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How to land startup funding from Brookfield Asset Management, which manages $600 billion in assets

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There are big investment firms, and then there are big investment firms. Brookfield Asset Management, the Toronto-based 122-year-old outfit whose current market cap is $63 billion and that oversees $600 billion in assets, clearly falls into the latter camp. Think real estate, infrastructure, renewable power, private equity, and credit. If it falls into a defined asset class, Brookfield probably has it in its portfolio.

That’s also true of venture capital, though venture is new enough to Brookfield that founders who might like its capital are still getting the memo. Indeed, it was a little less than four years ago that Brookfield Technology Partners began investing off the company’s balance sheet and soon after recruited Josh Raffaelli — a Stanford MBA who cut his teeth as a principal with Draper Fisher Jurvetson, then spent another five years with Silver Lake — to lead the practice.

Its existence came as a surprise to him, actually. “I’ve been a tech investor in Silicon Valley,” says Raffaelli. “My entire professional career has been in a 15-minute drive from the house I grew up in. And I had never heard about Brookfield before they started this practice because it’s in businesses. It’s in real estate. It has done things that are not generally tech-enabled.”

Not until fairly recently, that is. Raffaelli and his 11-person team have not only made dozens of bets since then, but they’re currently investing out of a pool of capital that features third party capital in addition to that of Brookfield — which is a first. As for what they are looking for, the idea is help Brookfield reimagine how its many office towers, malls and other real estate might be used or developed or leased or insured. It’s to make Brookfield smarter, better prepared, and more profitable. In return, the startups get industry expertise and a major customer in Brookfield

 

To date, its bets have varied widely, as with Armis, an IoT startup focused on unmanaged device security; Loanpal, a point-of-sale payment platform for solar and other home efficiency products; and Carbon Health, a primary care company that blends real-world and virtual visits. “”We’re getting our themes effectively from the Brookfield ecosystem,” Raffaelli says.

Pulling back the curtain a bit more, Raffaelli says his team writes checks from $25 million to $50 million dollars and that they look for companies with $10 million in revenue that are seeing top-line year-over-year growth of more than 100%. In terms of pacing, they jump into roughly one new deal per quarter.

The fund is also independent and has its own custom committee, but that the committee is made up of the senior managing partners from each line of Brookfield’s businesses. (“These are the people that actually help us translate our investment themes that we’re generating here,” Raffaelli notes.)

To highlight how the operation works, Raffaelli points to Latch, a smart access software business that announced last month that it’s using a blank-check company backed by the real estate giant Tishman Speyer to become publicly traded. Brookfield owns roughly 70,000 multifamily units in North America, “so we have a lot of doors that need a lot of locks,” Raffaelli says. Latch, of course, is not the only smart access lock out there, so Brookfield ran “what was almost like a mini [proposal process], reaching out to all different companies in the market to understand how they compete,” he says.

It was a “six-month exercise,” but ultimately, his group led Latch’s Series B round in 2018 and since then, Brookfield was bought about 7,000 blocks from the business. It’s a meaningful difference, considering that when Brookfield first invested, the company had less than $20 million in bookings and those 7,000 locks have since brought in an additional $10 million to $15 million in revenue, Raffaelli says. “When we buy a lot of things at that stage of a company,” he adds, “we’re meaningfully enhancing their trajectory.”

It’s not a foolproof strategy, doubling down. If Latch’s locks turned out to be lemons (they haven’t), Brookfield would be out a big check along with that capital expenditure. It’s why Brookfield takes its time, says Raffaelli, adding that if he has done his job right, his team is involved with a company well before it is raising a round and shown already that it is a “strategic partner that has another lever.”

Either way, Raffaelli says that while the commercial real estate market has been hard hit by the pandemic, it has, counterintuitively, been a productive time for his group given the stronger incentive it has given the real estate world to adopt tech tools faster. Among the bets about which Raffaelli sounds most excited right now is VTS, for example, a leasing and asset management platform that can show properties remotely, and Deliverr, an e-commerce fulfillment startup that Raffaelli describes as “Amazon Prime for everybody else.”

In fact, Raffaelli convincingly argues that while the use case for a lot of real estate is changing,  the so-called built world remains Brookfield’s strongest competitive advantage given the size of its footprint.  The way he sees it, its options going forward are plentiful. “You’re looking at retail locations becoming ghost kitchens; you’re looking at retail locations turning into distribution and logistics facilities. We can turn physical locations into healthcare sites for [our portfolio company] Carbon Health, and our mall locations into locations for urgent care and primary care clinics for testing and vaccinations.”

It will never be a completely seamless transition. Brookfield has to be “thoughtful” given the pandemic and its devastating impacts, too. But Raffaelli comes across as excited in conversation nonetheless. The idea of turning physical real estate into a “mechanism for change within technology businesses,” adds Raffaelli, is a “very powerful place to be.”

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Singapore-based Raena gets $9M Series A for its pivot to skincare and beauty-focused social commerce

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A photo of social commerce startup Raena’s team. From left to right: chief operating officer Guo Xing Lim, chief executive officer Sreejita Deb and chief commercial officer Widelia Liu

Raena’s team, from left to right: chief operating officer Guo Xing Lim, chief executive officer Sreejita Deb and chief commercial officer Widelia Liu

Raena was founded in 2019 to create personal care brands with top social media influencers. After several launches, however, the Singapore-based startup quickly noticed an interesting trend: customers were ordering batches of products from Raena every week and reselling them on social media and e-commerce platforms like Shopee and Tokopedia. Last year, the company decided to focus on those sellers, and pivoted to social commerce.

Today Raena announced it has raised a Series A of $9 million, co-led by Alpha Wave Incubation and Alpha JWC Ventures, with participation from AC Ventures and returning investors Beenext, Beenos and Strive. Its last funding announcement was a $1.82 million seed round announced in July 2019.

After interviewing people who were setting up online stores with products from Raena, the company’s team realized that sellers’ earnings potential was capped because they were paying retail prices for their inventory.

They also saw that the even though new C2C retail models, like social commerce, are gaining popularity, the beauty industry’s supply chain hasn’t kept up. Sellers usually need to order minimum quantities, which makes it harder for people to start their own businesses, Raena co-founder Sreejita Deb told TechCrunch,

“Basically, you have to block your capital upfront. It’s difficult for individual sellers or micro-enterpreneurs to work with the old supply chain and categories like beauty,” she said.

Raena decided to pivot to serve those entrepreneurs. The company provides a catalog that includes mostly Japanese and Korean skincare and beauty brands. For those brands, Raena represents a way to enter new markets like Indonesia, which the startup estimates has $20 billion market opportunity.

Raena resellers, who are mostly women between 18 to 34-years-old in Indonesia and Malaysia, pick what items they want to feature on their social media accounts. Most use TikTok or Instagram for promotion, and set up online stores on Shopee or Tokopedia. But they don’t have to carry inventory. When somebody buys a product from a Raena reseller, the reseller orders it from Raena, which ships it directly to the customer.

This drop-shipping model means resellers make higher margins. Since they don’t have to carry inventory, it also dramatically lowers the barrier to launching a small business. Even though Raena’s pivot to social commerce coincided with the COVID-19 pandemic, Deb said it grew its revenue 50 times between January and December 2020. The platform now has more than 1,500 resellers, and claims a 60% seller retention rate after six months on the platform.

She attributes Raena’s growth to several factors, including the increase in online shopping during lockdowns and people looking for ways to earn additional income during the pandemic. While forced to stay at home, many people also began spending more time online, especially on the social media platforms that Raena resellers use.

Raena also benefited from its focus on skincare. Even though many retail categories, including color cosmetics, took a hit, skincare products proved resilient.

“We saw skincare had higher margins, and there are certain markets that are experts at formulating and producing skincare products, and demand for those products in other parts of the world,” she said, adding, “we’ve continued being a skincare company and because that is a category we had insight into, it was our first entry point into this social selling model as well. 90% of our sales are skincare. Our top-selling products are serums, toners, essences, which makes a lot of sense because people are in their homes and have more time to dedicate to their skincare routines.”

Social commerce, which allows people to earn a side income (or even a full-time income), by promoting products through social media, has taken off in several Asian markets. In China, for example, Pinduoduo has become a formidable rival to Alibaba through its group-selling model and focus on fresh produce. In India, Meesho resellers promote products through social media platforms like WhatsApp, Facebook and Instagram.

Social commerce is also gaining traction in Southeast Asia, with gross merchandise value growing threefold during the first half of 2020, according to iKala.

Deb said one of the ways Raena is different from other social commerce companies is that most of its resellers are selling to customers they don’t know, instead of focusing on family and friends. Many already had TikTok or Instagram profiles focused on beauty and skincare, and had developed reputations for being knowledgeable about products.

As Raena develops, it plans to hire a tech team to build tools that will simplify the process of managing orders and also strike deals directly with manufacturers to increase profit margins for resellers. The funding will be used to increase its team from 15 to over 100 over the next three months, and it plans to enter more Southeast Asian markets.

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