Corporate VC offers unique benefits in Southeast Asia – AVCJ Forum

“What makes corporate venture capital strong is that one of the most expensive things for commercial VC firms is actually patience,” said Sae Min Ahn, managing partner at Rakuten Ventures, the VC arm of Japanese e-commerce firm Rakuten. “In corporate VC we can afford not to invest for a year, or to only invest once a year. That allows us to get a much clearer view on what we need to invest in.”

Since corporate VCs are not required to commit capital within a fixed time frame, they can also afford to play in markets where traditional GPs see too much risk. Dan Siazon, a senior vice president at Kickstart Ventures, the investment arm of Philippines-based telecommunications firm Globe Telecom, pointed out that due to its familiarity with its home market the company can play the role of early-stage support that is already filled in other markets.

“In the Philippines unfortunately pure venture guys have not stepped up to take the risk. And there’s a gap since the government cannot do it, because the government has bigger priorities – we’re not wealthy like Singapore,” said Siazon. “So it takes corporates to fill that gap and to take that risk.”

Start-ups also find corporate venture investors attractive, as these backers offer the chance for collaboration with the parent company as well as with other investees. In the case of Kickstart, local technology start-ups are keen to explore the possibilities offered by Globe’s experience in telecommunications, which can help them optimize user experience in their mobile apps.

While other strategic players offer the stiffest competition to corporate VC investors, traditional VC firms tend to seek out corporate players as partners in their investments. Ajay Lakotia, executive director at Fosun Kinzon Capital, the Silicon Valley-based VC arm of Chinese conglomerate Fosun International, attributes this to the perception that corporate investors can offer GPs’ investees valuable opportunities.

“When it comes to the venture capital funds, that's where I think everyone is a collaborator and not a competitor. They feel that they have a lot of early-stage investments that can be a target for us,” said Lakotia. “That's the way Fosun has positioned itself with all the early stage investors, and I'm sure all our counterparts are doing that too.”

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• Topics
• Southeast Asia
• Venture
• GPs
• Investments
• Singapore
• Fosun Group
• Rakuten
• AVCJ Events