Thai bank sets out to help kick-start Thai start-ups
The majority of Thai startups are trapped in the Seed to Pre-Series A stages, and many local investors still perceive this stage as risky and seek more certainty before committing, according to an internal market survey by Krungsri Finnovate.
That results in start-ups facing challenges in progressing beyond the early stages. This trend contrasts with the situation in other countries where venture capitalists actively invest in the early stages to push start-ups forward.
That could be about to change now that Krungsri Finnovate is taking strategic steps to revitalise the start-up ecosystem in the country.
Sam Tanskul, Krungsri Finnovate’s managing director, says he’s concerned about the recent decline in series A-level start-ups in Thailand, citing a reduction in funding flow and the disappearance of start-up incubation centres despite increased government support.
To address this, Krungsri Finnovate is planning to launch “FinnoEfra” Private Equity Trust, a fund with a value ranging from 1 billion to 1.3 billion baht next March. The fund aims to support start-ups in the early stage to pre-series A levels in the impact technology and digital transformation sectors, with investment sizes ranging from 10-20 million baht per company.
Sam highlighted the need for increased investor support for Thai start-ups, expressing confidence in Krungsri Finnovate’s role as a discerning Corporate Venture Capital (CVC). The company emphasises a sustainable investment approach, he noted, carefully selecting start-ups that create social impacts.
“The current strategy aligns with a shift away from widespread spending and cancelling investments due to challenges in cost control and resource management. Krungsri Finnovate is actively involved in both domestic and international investments, allocating 80% of the portfolio to Thai start-ups and 20% to start-ups in the ASEAN region. Krungsri Finnovate has invested in start-ups in the Philippines, Vietnam, and Indonesia,” he said.
With more than 2 billion baht invested in 14 start-ups, Krungsri Finnovate anticipates a potential return of up to 20% per year. The company has started five to seven deals, with plans to complete all investments by 2024 and expand the portfolio to 25 start-ups. Additionally, six start-ups are gearing up for Initial Public Offerings (IPOs), with five targeting the Stock Exchange of Thailand and one eyeing a foreign stock exchange.
The 1 billion-baht Finnoverse & Futuristic Fund focuses on high-risk ventures in emerging technologies like decentralised technology, AI, cyber security, quantum technology, and ESG. The fund aims to secure an additional 10 deals within 2024.
Sam reaffirmed Krungsri Finnovate’s commitment to being a leading CVC by carefully selecting start-ups and fostering strong synergy in the Thai start-up ecosystem. The company has been involved in over 130 projects, collaborating with 38 business organisations and supporting more than 71 start-ups through various programmes including the FinnoSpark accelerator and the KFIN Family Meetup.
