3 ways global venture capital can drive transformative change

As we begin 2025, globalism is under interrogation. Protectionism, trade restrictions, and geopolitical tensions are rising. These forces have prompted many – from business leaders to policymakers to citizens – to question the viability of a truly global economy. In venture capital this manifests as a shift towards localized investment strategies, signalling a retreat from the global model that has long benefited investors and entrepreneurs.

The need for localized approaches is clear in tightly regulated industries like defence, pharmaceuticals, or state-dominated sectors such as utilities and infrastructure. But most sectors that venture capital firms invest in benefit from a global approach.

There is evidence that the deglobalization narrative is just that: a narrative. In fact, research from McKinsey found that global integration is growing, as trade, capital, data, and knowledge move across borders at higher volumes. BCG forecasts global trade to grow at 2.8% per year through 2032.

Venture capital remains wedded to old metrics such as market size, revenue, and profitability, which are no longer sufficient to evaluate a startup’s true potential. These frameworks fail to account for one of global venture capital's greatest advantages: pattern recognition, or identifying disruptive trends and scalable solutions across geographies and industries that would otherwise go unnoticed.

To solve today’s most pressing challenges, and begin the next wave of innovation, venture capital must adapt and embrace a broader set of metrics that reflect the complexities and opportunities of an interconnected world. When this happens, globalization will prove to be more than economic integration – it will be a catalyst for innovation and progress.

To move beyond traditional risk-reward models towards metrics that capture the broader value of the innovation, we propose three criteria for consideration:

The challenges of our time – climate change, healthcare inequities, and the digital divide – transcend borders and demand innovative, globally scalable solutions. Addressing these issues requires companies that can operate across diverse geographies, integrate international insights, and leverage cross-border resources.

Sustainability initiatives illustrate the complexity of this challenge. Technological breakthroughs are essential, but their impact often depends on successful global scaling. Promising innovations frequently encounter obstacles such as resource disparities, regulatory complexities, and varying market acceptance criteria.

Accacia, a B Capital portfolio company, exemplifies how startups can tackle these barriers. Its AI-enabled platform transforms carbon management for the real estate sector, helping organizations measure, analyze, and reduce emissions. Operating across Asia, the Middle East, the US, and Canada, the company combines advanced technology with localized insights to deliver scalable climate solutions tailored to diverse regulatory environments.

The real estate sector accounts for approximately 40% of global greenhouse gas emissions, making standardized carbon measurement and reduction strategies critical. Accacia’s global approach enables it to harmonize strategies across regions while adapting to local regulatory frameworks – such as new emissions reporting requirements from the US Securities Exchange Commission (SEC) and Singapore Exchange (SGX). By aggregating data and best practices across its markets, Accacia provides comprehensive solutions for decarbonization.

Global investors play a vital role in helping startups like Accacia overcome barriers to international scaling. By embedding commercial considerations early in a company’s development, they not only position startups for expansive growth but also enable the rapid deployment of critical solutions to address shared global challenges.

A company’s ability to adapt its solutions across diverse geographies and economic contexts is a significant driver of growth in today’s global economy.

The benefits of cross-border adaptability are:

Global investors can accelerate adaptability by leveraging extensive cross-border networks to identify high-potential companies worldwide, facilitate international expansion, and provide critical insights into market-entry strategies and regulatory environments. Prioritizing adaptability enables startups to unlock unparalleled growth opportunities, scale their solutions on a global stage, and secure their place in the international marketplace.

Global venture capital is vital for nurturing startup ecosystems, particularly in emerging markets. Beyond funding individual companies, it contributes to the overall economic transformation of regions. The World Economic Forum has identified entrepreneurship as a "missing piece" in many emerging economies, and global venture capital can help fill this gap. The benefits of an ecosystem-focused approach include:

An interconnected network also enables a more diverse innovator ecosystem. By fostering tech ecosystems globally, we can increase the number of entrepreneurs working on a wider range of problems. This diversity of thought and perspective can lead to novel solutions we may not have otherwise considered.

Adopting a decentralized structure is essential for rethinking traditional approaches to growth. Embedding investors in local markets while maintaining a global outlook provides a well-rounded perspective and the strongest possible support for portfolio companies. Distributed teams offer invaluable insights into market-entry strategies, regulatory landscapes, and cultural nuances, as well as global pattern-matching capabilities that allow for the replication of previous successes.

Companies and investors that embrace this global approach won't just unlock superior financial returns – they will shape the future of innovation and equity on a global scale. The current climate may call into question the merits of globalism, but it's key for solving humanity's greatest challenges. For instance, in terms of addressing climate change, this global approach enables the rapid scaling of innovative green technologies across diverse markets, accelerating the transition to sustainable practices worldwide. From climate change to economic inequality, global venture capital – with its unique ability to identify patterns, nurture innovative ecosystems, and scale transformative solutions across borders – is well-suited to take the lead in driving progress.