Krungsri Finnovate, a corporate venture capital (CVC) firm under Bank of Ayudhya (BAY), plans to splash out US$10 million on three local non-fintech startups in the first half of 2020 and is also reportedly exploring investment opportunities in tech startups in neighbouring Cambodia.
Other countries being looked at are Indonesia and the Philippines, for business expansion in Asean markets during the digital age.
Krungsri Finnovate aims to develop the bank’s digital technology footprint in Thailand as well as in neighboruing countries.
The company has been in talks with several Thai startups. Three of them, representing proptech, agritech and payments, are expected to reach agreements by June, said Thakorn Piyapan, head of digital banking and innovation at BAY.
The $10 million is half the sum Krungsri Finnovate has raised for this year’s investment, Mr Thakorn said, and the company can mobilise additional funds if needed.
The CVC had initial funding worth $30 million when it was incorporated in 2018. This figure rose to $50 million when the latest $20-million fund mobilisation was included.
Some of the $50 million was invested in Grab under parent Mitsubishi UFJ Financial Group Inc’s $706-million investment in the ride-hailing firm.
Mr Thakorn said that while the non-fintech startups will not directly support banking services, they will benefit the country’s overall digital infrastructure development.
For instance, Krungsri Finnovate’s recent investment in proptech company Baania enables the bank to access a database for pre-financing.
The prospective investment in the local agritech firm will support the bank’s customers in the farm sector with technology development to improve efficiency and productivity.
Separately, Krungsri Finnovate managing director Sam Tanskul said two startups in which the company has injected money aim to seek a listing on the Market for Alternative Investment (MAI).
Fintech investment and wealth management platform Finomena, one of the two startups, plans to raise capital through a Series B funding round worth $13.5 million before listing on the MAI by 2023, while Baania is also planning to go public.
“Krungsri Finnovate has invested in the two startups for about three years and earned returns three times higher than investment in one of the two,” Mr Sam said.
BAY, the country’s fifth-largest lender by assets, also plans to invest in InnoSpace Thailand Co, a joint venture between the public and private sectors.
InnoSpace, in partnership with Cyberport Hong Kong and the Israeli Economic and Trade Mission, is a startup incubator. The incubator is supported by financial institutions like BAY, energy companies, industrial conglomerates and state agencies.
First published in Bangkok Post https://www.bangkokpost.com/business/1871269/finnovate-earmarks-10m-for-startup-trio-in-first-half