The Business of Tree Planting: Bas Fransen from EcoMatcher

Today's guest is Bas Fransen, CEO and founder of EcoMatcher. Originally from Holland, Bas started his career in the Royal Dutch Navy and went on to become a technology executive with long stints at Phillips Semi Conductors, and then IBM.

He founded the tree-planting company he runs today, called EcoMatcher, in 2016. The for-profit business has by now planted over a million trees and is on track to plant several million more in the coming years.

Linkedin: https://www.linkedin.com/in/basfransenhk/
EcoMatcher:  https://www.ecomatcher.com/
The Hidden Life Of Trees: https://www.amazon.sg/Hidden-Life-Trees-Communicate_Discoveries-Secret/dp/1771642483

Hosted by Arshad Chowdhury, Managing Partner at Betatron: Betatron.co
Twitter: @arshadgc
LinkedIn: https://www.linkedin.com/in/arshadgc/

TRANSCRIPT

0:53 How did you get into this business?

4:14 Planting a tree may seem simple, but what complexities have you encountered in the tree planting business?

6:12 Who maintains and monitors the trees in the areas where you operate?

8:09 In terms of carbon sequestration, how do you measure it, and how much carbon does each tree sequester?

9:51 What can listeners do to identify potentially fraudulent companies or practices?

12:38 Has your perspective changed after being in the tree planting business, and have there been any unexpected personal changes?

14:30 What are the key trends and opportunities you see in the tree planting and carbon offset industry in Asia?

16:27 What's next for EcoMatcher?

Transcript

0:00

this is Betatron investing in Asia, a podcast for people who wanna invest in Asia's future. I'm your host, Arshad. Chowdry, a partner with Betatron Venture Group based in Hong Kong..

Arshad: 0:11

Today's guest is Bas Franssen, CEO and founder of EcoMatcher. Originally from Holland, Bas started his career in the Royal Dutch Navy. He then went on to become a technology executive with long stints at Phillips Semi Conductors, then IBM. He founded the tree planting company he runs today, called EcoMatcher, in 2016. The for profit business has by now planted over a million trees. And is on track to plant several million more in the coming years. Eco matcher is a betatron portfolio company. Thanks for joining today, boss. As you help us understand the ins and outs of the tree planting business here in Asia.

Bas: 0:52

Thank you. Rashad.

Arshad: 0:53

So how did you get into this business?

Bas: 0:55

I am super passionate about technologies and I've developed like eight, eight years ago or so passion for sustainability. And I've been always thinking, how can we combine both in, in a venture, which enables me to. To contribute, to, do something really cool for, foreseeable future. I'm 58. I'm not a guy who, wants to spend his time on the golf course I really wants to make a difference and meet interesting people and travel the world. Initially I started off with a venture making iPhone cases out of reclaimed teakwood and the gadget or the feature was that we would laser engrave in every iPhone case a number which would represent the tree people would have planted or adopted the moment they would buy that iPhone case. And they would be able to, to track that on a very simple app. This was more like the iPhone case was the key product and, and the tree was, that was one of the features my clients corporates, because I was marketing the, the, the products to corporates as a corporate gift. They said, Bas, we are actually more intrigued with that number because that number linked to an environmental asset is truly scalable. So initially been talking to, to FedEx, for example, to link the tree to a tracking number. Step by step, I came to the conclusion that actually the key part of the value proposition was not the iPhone case, but was the tree or that number linked to an environmental assets. So I discontinued that first company and I established a new software platform company, where we were focusing purely on This number linked to an environmental asset, which at this moment is a tree. So instead of the company giving their customers a plastic pen, they now can gift a tree And what that transaction is, is that you basically get a URL, The customer can click the URL and through the EcoMatcher platform, you can virtually travel to the tree in 3D. Look at the tree, look at the farmer, listen to sounds. You can even chat with the tree because every tree is chatbot powered. And we do that in order to make. Sustainability, more fun and engaging, but actually after this corporate gifting focus, we were approached by companies who are in the market research business. They said, Hey, we would love to use your service using trees as rewards for respondents finishing surveys. So now we are dealing with market research companies offering trees as a, reward for people finishing surveys. We're now working with brands on loyalty programs. The more products you buy, the more trees you can get. What we have tried to do is to build a digital platform linked to real trees. And offer a value proposition to companies where they can integrate tree planting in their business with the objective to increase customer loyalty and employee engagement.

Arshad: 4:14

Planting a tree, it seems pretty simple. You think it's not controversial. It seems relatively easy to do. But what have you discovered to be some of the complexities in

Bas: 4:24

the business? Tree planting is, is a science. It actually has many, many elements which have to be addressed to ensure that you get a proper survival rate for example. You need to Physically dig a hole in the ground and drop the seedling, cover the ground and make sure that tree is properly planted. It needs to be, maybe in the first couple of weeks needs to be watered and you need to monitor growth of the trees as well and making sure that there was not invasive species which are taking over those type of trees. But if actually before in the tree nurseries, you have to grow seedlings which have at a certain point in time the right height and physical mass to be transported and that all takes attention that takes knowledge that takes care. The more I've involved myself and being on location, meeting farmers, planting trees myself in different parts of the world you start to appreciate that it's not as, simple as you may think. For us as EcoMatcher, when we team up with partners with foundations or NGOs who are specialized in tree planting, we look at every element of how do they grow the trees? Do they have relationships with universities? Are they updating their knowledge around tree planting and growing seeds on a regular basis? Those type of things for EcoMatcher. super important because at the end that all will bring the highest level of survival rate. What you don't want is to plant the tree and maybe that tree will die or that seedling will die after a couple of weeks and that's a waste of effort,

Arshad: 6:12

who in the settings where you guys are operating, who's maintaining it and watching the thing grow to fruition?

Bas: 6:18

The settings where we plant primarily in developing countries around the equator places like Uganda Ecuador, the Philippines, Indonesia India, we are working with foundations, which are NGOs whom we are vetting, bringing on board on the platform, providing funding, which we get from our clients and tasking those foundations with planting trees, where do they plant? They plant primarily in small holder farmer premises in monasteries in lands that is owned by somebody, what we in general, it's not always true, but in general not do is plant with our partners in the wild, because they're. Care and monitoring is, more difficult to organize, but when we plant in, for example, land of smallholder farmers, those farmers will be in charge in monitor and making sure that those trees are growing and they want those trees to succeed because the trees will bring. economical benefits for those farmers the soil improves because of planting trees, water wells are coming back. And I've seen the many, many cases where initially the land of a farmer was like a really poor piece of land. And through tree planting that land has And they can in between trees, for example, grow crops. As I mentioned earlier we, we are planting in some countries fruit trees, which are bringing fruits, which, and the proceeds of those fruits are, are going to farmers, the farmers and the foundation specialized in tree planting. Are all very involved in, planting of trees and they get benefits of making sure that those trees really mature and grow In terms of the

Arshad: 8:09

positive impacts that trees can have specifically related to carbon sequestration, how should we think about that? Like how much carbon are we talking about per tree? I know it must be different for every tree in different regions, but how do you guys think about that?

Bas: 8:24

We know from every tree we plant the, the specific species, and we have carbon data of every species we plant. Now this is data coming from all kinds of academical studies. The, the challenge is that it's actually very complicated to to calculate the precise number of carbon sequestration on a yearly basis. What we have done is following academic research coming out of the U S where we take one size fits all approach, we calculate with 25 kilo CO2 sequestered per year. And we take that over a period of 10 years. So a total number of 250 kilo carbon sequestration over lifetime of a tree. Now this is, in some cases, it's. too little. In some cases a little bit too much, but it averages out very, very nicely. If the audience here has an interest in how we do that and how we calculate that and the formulas is all available on our website.

Arshad: 9:29

In terms of the industry itself. It's been surprisingly a controversial one and I think in the past there have been examples of large scale fraudulent in the industry. So can you tell us about how that happens and maybe even what listeners can do to identify potentially fraudulent companies or practices that are happening right now?

Bas: 9:51

There is a complete lack of transparency. Now, I don't claim that every organization planting trees are fraudulent and not doing their job. There are amazing organizations doing the right thing, but there are also many who are not doing the right thing, who are just in there for the money. So what we do and what we address as EcoMatcher is bringing transparency in planting trees. We give our customers who are investing in tree planting data of every tree which has been planted. That data pictures, GPS data, et cetera. We actually sell through our blockchain platform back to our clients. So clients have visibility of where every dollar has been going back to the foundations. Actually, they get from EcoMatcher. digital tree planting maps. So they are actually not only getting the funds, but they also getting the insight in all the tree planting projects they have been pursuing themselves, which is a significant improvement over the past where they were having, a simple piece of paper and pen drawing some simple plots and, making a cross on the paper where maybe a tree has been planted so we give them the tools to kind of elevate their way of working. So it works both sides, but the transparency is crucial. So for the listeners on this call go to organizations, websites, look at the track record. They have the type of customers they work. In general, you already get a good impression from their website whether that organization is. Let's say good or fraudulent. Look at their social media profile. Do those people have followers on one of the platforms? If not, maybe a little bit fishy. Look at, what was the latest post they have posted on social media, on their blog, on their website. If that is like two or three years old, most likely that the organization is just milking what they have been doing in the past. Look at whether they are an official registered foundation in the country where they plant those type of things. And, and you should really do that because there is a lot of. Kind of unfortunate scammers out there just trying to make money, claiming to plant trees and tree planting is hot at this moment, right?

Arshad: 12:21

Makes sense. And I want to pivot a little bit more towards your own personal journey. When we met several years ago, you told me that you weren't actually a tree hugger by nature. But has that changed now after a few years of being in the business? And has the business changed you in any other ways, expected or

Bas: 12:38

unexpected? Yeah, indeed. I remember that conversation, Arshad where I was maybe the, the, the, the gold entrepreneur basically chasing a business opportunity. I'm going to say that I, I am more of a tree hugger, but in a sense that I much more appreciate. the complexity and also the contribution trees can bring to society. It's an actually it's a fascinating piece of nature. If you look at a tree and you just see the, the tree and the leaves, et cetera, you have no idea where actually what's happening underneath. There's a cool book. I think it's called the life of a tree And he very interestingly describes all the bits and pieces of a tree. For example, trees can communicate with, with each other underneath in the ground through the the roots. So they're very impressive species. But I've also seen the contribution of tree planting to people that Bhutan or Uganda or Ecuador, and I meet people who through The contribution and the money we provide enable them to plant trees and we can elevate lives of people. That's really, really cool. That's really cool. That is actually heartwarming and it only motivates me more to scale up this venture, get more people involved, use the technology to convey the message and, and scale this, in every dimension. So yes, I'm a little bit more of a tree hugger, but not so much that I want to, hug the tree every day, but because of the learnings of what trees can, do and how they, how they work and what they can do for society.

Arshad: 14:37

I think that book was called the hidden life of trees,

Bas: 14:40

Exactly.

Arshad: 14:40

Okay. We can add that one into the show notes So in terms of the business today, do you guys have any direct competitors? Who are they and how are you guys differentiating?

Bas: 14:49

Yes, we do have competitors. There, there is a company in Italy doing something similar. What we try to do, and there are, there are of course, many companies in the world who are in, into tree planting we are very focused on. B2B. We focus on companies. So the focus is B2B2C. So what we do is provide tools and digital tools and features and services, which companies can use to integrate tree planting in their business. And we do that through blockchain. We do that through, for example, the partnership we have with Microsoft on the integration and Microsoft Teams. And, and so we very much want to be that technology company. A lot of other companies and tree planting, they, They may do a little bit what we do, but they use technologies which are coming from a third party. They don't offer a complete platform. They may have like a portion of the platform which they have and use and then integrated into Excel spreadsheets or something like that. When you look at EcoMatcher from A to Z, everything is developed. in house. It all connects together in scalable, professional ways. We know we truly understand big data. We understand blockchain. We understand software development for apps, for web apps, for, for teams app, for example. And that is a, that is a competence. This actually, I'm going to say comes from my time in IBM, where I have seen that. If, the core value proposition is technology, you need to own that you don't should you should not outsource that. I've seen examples of startups who maybe had a good idea and then they outsource the technology development and then the technology developer left or they don't pick up the phone anymore in India or something like that or in Vietnam. And then you're stuck. So I focus with my team and I'm, I'm, I'm blessed to be part of an amazing team of people and you met two of them. They're still with us and we have now many, many more who are passionate about developing technologies, so the, the technology layer. Is where we bring the value and we are not deviating from that. We, we, this is where we can make a difference.

Arshad: 17:28

You guys are taking what seems like extraordinary measures. To ensure that the trees that you say you're planting, you're actually planting and that they're making a difference. But what do you say to people who are concerned about using tree planting, especially for big corporates using tree planting as greenwashing efforts rather than making other needed changes in the business? How do you guys think about that?

Bas: 17:52

for me, if a company comes to EcoMatcher and we have many customers who are, if you look at the size of the, of the business and then the order of trees they want to plant with us secretly, I think, Hmm, that smells a little bit like greenwashing maybe, but This is not my business. We know a Paul Polman, the previous CEO of Unilever, a company very much in the, in the leading seat of when it comes to globally addressing sustainability. One said, if, if companies are. By the end of this decade are not having their acts together when it comes to building in addressing sustainability and becoming a more sustainable venture. They will be out of business because customers and employees are demanding change. So when companies come to EcoMatcher We are not be, the one with the finger, let's say, being the, one who says, Oh, you should plant more or you should not do this because this is bad. This is not up to us. If they think that is the best for the business. If, but at the end, their customer and their employee will either reward the company or will penalize the company over time. So that's, that's the view of EcoMatcher. We don't of course we encourage companies to plan more but in a very positive and in a positive way. But we're not telling companies whether they are bad or, or doing something bad. That's not up to us.

Arshad: 19:33

on that subject, what are some of the ways in which you measure whether EcoMatcher is making a difference? What metrics do you guys track? And I think you mentioned many of them, but help us understand exactly what are the key metrics for you guys.

Bas: 19:47

Yes. We are reporting on three key STGs, sustainable development goals, customers, and of course, also EcoMatcher. We measure very simple on the number of trees we have planted. We measure also. On the number of families which are being helped through tree planting and we are calculating the, the carbon sequestration of the trees like to date. So how much has been sequestered to date and how much will be sequestered over lifetime. Those are related to STG 10, 13, and 15. Then, of course, we have the, the, the financial KPIs, but those are internal KPIs, how we measure our business and, and, address the funds we have growing the business and making sure that we keep ahead of competition and remain competitive because this is a market which is very much in in motion, there are tree planting is super hot. Everybody wants to plant trees. And and so there are many more companies joining, this, this industry, and we need to make sure that we keep ahead of the pack. The good thing though, is that with the six years of, investment, we have already done with the team and building the platform, this platform actually has become pretty advanced. It's not something you copy overnight. Neither do you copy overnight the relationships you have been building with the foundations with whom we work. We currently plant in 15 countries and we are continuing to expand that because we want to offer our customers more trees, but we're also very needy for trees. We need more trees. So we need more. To, to, to join us last. Also, we want to diversify our suppliers. So if one or two suppliers are unable to supply because of whatever reason, then we have sufficient other options to, to tap into. So we will never run out of trees either.

Arshad: 21:56

Your customers seem to be multinationals who have footprints everywhere, but specifically focusing on Asia. What is the demand like for tree planting from a corporate perspective?

Bas: 22:06

Most of the business at this moment we do in the Middle East, frankly speaking but when it comes to Asia, there are a number of companies whom are kind of innovative I think still there is so much room for improvement in. Globally, including Asia, where companies, in my view, still don't see that. If you look at, for example the valuation of companies, there are studies that companies who are properly addressing sustainability, and it's not only about tree planting, but it's just in general, are companies which are valued better, and because they are on the longer term, probably a company. With the better chances to succeed compared to a company who is not doing anything. There is so much room for improvement in Asia. There are of course, many, many awesome companies. And I think we're only scratching the surface in Asia. I think more and more companies see. I think the light in my view I must say progress sometimes can be significantly faster. I personally get always a little bit frustrated when companies claim that they are going to be carbon neutral by 2050, which is like 27 years from now. I say, well, really? It cannot not be a little bit faster, right? Yeah, for me, that for me, in many, many cases is a greenwashing statement because I appreciate some industries which are super complex and you cannot steer the tanker, in, in a couple of days that takes time. But there were also industries where change can be happening significantly faster. It's just a matter of. Focus and attention and and executive buy in.

Arshad: 23:58

And what do you think the tree planting business looks like 10 years from now? Is the business of tree planting going to see consolidation with acquisitions happening, or will it continue to be relatively fragmented or will governments possibly replace private efforts?

Bas: 24:14

Yeah, on the, on the last one, I think that governments are in some cases are amazing institutes give, Singapore, for example they have so much, well, their act together, but they also pay their people well. And they have. They have a smart bunch of people who are clearly and, looking at how Singapore can develop in the future. There are of course also other governments where that is not the case. So there may be initiative can be, can be established, but then it's all about the execution as well. I don't think that, that governments will take over private, space when it comes to tree planting. I think there will be maybe some consolidation. When it comes to, to EcoMatcher, I think we, are looking at absorbing. Other technologies and maybe companies who can compliment the value proposition we, we, we offer to customers. And that's, that keeps us busy, that keeps me busy and that's super interesting. But of course, I think there will be some level of consolidation, but that will not happen very soon.

Arshad: 25:21

Have you come across any novel technologies outside of EcoMatcher that you think can really accelerate tree planting?

Bas: 25:27

Well there, in order to, to really establish or a proper survival rate, you dig a hole and, and do a proper tree planting. There are locations of course, where that is physically impossible. mountainous areas, areas without having proper access maybe in areas where there were significant forest fires or something of that, maybe it's almost inhabitable to, to, to go there. And so there are companies, they, they use drones to, to drop seeds in those types of areas. Now that some claim that the survival rate is very high. I'm not convinced, but it is at least an opportunity to get into tree planting and areas where maybe humans have difficulty to access and do the, the thing like digging a hole, et cetera. So I found that very interesting. We don't engage with that because what is crucial is also the social element of, partnering with farmers and with foundations, because that also adds to the storytelling. Part of of the value proposition we give to customers, but that is interesting where you see also new developments emerging is using satellite technology to get more data out of out of the satellite pictures, for example, carbon sequestration data where you can do analysis with, the pictures you get and the pictures also The satellites also get, like your iPhone 12, 13, 14, where the camera gets better. Also, those satellites are getting better when it comes to resolution. So the quality of the pictures you get in combination with advancements in software technology and analysis tools brings you opportunities to, to get more insight in your tree planting projects. So those are. In that particular part, we are monitoring that and looking into possible integration into EcoMeasure as well. And

Arshad: 27:27

finally, Bas, are you more or less optimistic about the impacts of climate change and humanity's ability to meet those challenges now versus say 10 years ago?

Bas: 27:38

Let's say my personal view is that I am not very hopeful. And the reason is that I see progress, but the progress is not accelerating now from an eco metric perspective, we are not every day telling everybody that the world is kind of fucked up and we need to it's, it's, it's like very, very bad. We focus on solutions on what can we do to improve. But a lot of things need to accelerate, need to change, and people should not look at each other for the other to start a solution, but need to look at themselves to, to, to make a contribution. And that starts with yourself. Look at the, the natural disasters we, we're, we're having the temperature rise in the oceans, the it's, it's not looking very, good. What I hope is that the leadership, and I say that between brackets, the global leadership, the G20, because at the end, it's also about driving policy and forcing people to make change. We cannot, expect that everybody is has the best for, is thinking about the bigger picture. I think a lot of people also think about themselves. And I think that through policy change and acceleration of policy change, and we hope hope we get some we can accelerate it. But if you look at the political agenda of the political landscape at this moment, I am not very hopeful. We are apparently more interested in, doing a little bit of acquiring some land and. Rather than, focusing all those military dollars into,, collectively, addressing the climate crisis. Because at, at the end, the climate crisis or the climate change is a col is a collective effort that is not the effort from one country or one person. Climate change doesn't know borders. The, it's, it's, it's a global issue. And this needs to be addressed globally. A very good initiative. Is still there is the Paris Agreement. That is a fantastic global initiative. The execution or the implementation and the monitoring of that. is unfortunately not super fantastic. We need to accelerate that. People need, and people need to see that also. Maybe if you were a politician, I would, I would say, see this just like a cost, like a company needs to see sustainability as a business opportunity. I think for a politician, You, I think sustainability can be, an opportunity to become a better politician and become more popular, right? And that so I'm, I'm carefully hopeful, maybe I'm carefully hopeful, but a lot of stuff needs to change. As EcoMatcher, we keep on driving for, we keep on pushing forward. We do what we do well. We plant trees. That's our contribution. Hopefully many more, many, many more we can convince many more companies to participate and work with EcoMatcher, improve their business, plant more trees. That's our contribution. If there are, let's say, 100, 000 EcoMatcher companies in the world doing different things, I think collectively we have an opportunity. But there needs to be an acceleration in, in that respect.

Arshad: 31:05

All right on that note boss, thank you so much for taking the time to talk to us And I wish you really well, as you continue to grow and integrate with some of the world's biggest companies to See measurable impact in certain in terms of trees being planted and carbon being sequestered. Thanks so much for joining today

Bas: 31:23

Thank you. Rashad. Thank you very much. Have a good day

31:29

Thanks for listening today. If you wanna know more about Betatron, where we invest in fast growing B2B startups throughout Asia, visit our website@betatron.co. I'm your host, Arshad shadowy. Find me on Twitter at arshad gc, where I'd love to hear your ideas about guests and topics related to investing in Asia.