Fund focus: Thailand gets serious about fintech

When the government launched its Thailand 4.0 innovation agenda last year, there was no indication that it would focus on financial technology per se. But in the meantime, a conspicuous flurry of venture activity from the country’s banks has suggested otherwise.

Among the financial institutions starting VC programs in recent months are Kasikorn Bank, Bangkok Bank, Siam Commercial Bank and Government Savings Bank. The last has been the most ambitious, having teamed up with the Stock Exchange of Thailand to establish two venture funds worth a combined TBH1.5 billion ($44 million).

These launches round out the government’s SME Private Equity Trust Fund program, which kicked off this year with Fund I at THB500 million. The rollout of Funds II and III at THB500 million and THB1 billion, respectively, is putting the focus back on fintech with the nomination of Expara Thailand and Premier Advisory Group as investment managers.

Expara – which was arguably the first VC backer of Southeast Asian fintech after a 2007 commitment to 2C2P – will deploy Fund II in seed stage investments in the range of THB5-20 million. The firm already has a pipeline of 21 companies and expects to make at least seven investments in the next nine months, plus another 30-40 by 2021 with a strong emphasis on fintech.

“The most exciting fintech investments that we will make over the next four years are going to be in sub-segments that don’t even exist today,” says Douglas Abrams, a managing director at Expara. “If you look at the most successful start-ups in the last 20-30 years like Amazon, eBay, Airbnb and Uber, they’ve almost all been companies that started in intermediated sectors and cut steps out of the value chain to provide better outcomes for players on both sides. Financial services is a prime sector for that.”

Abrams got his start in the region in Singapore in 2000 and sees a direct parallel between Thailand 4.0 and the National Research Foundation, which jumpstarted the city-state’s venture scene in the mid-2000s. After a few years of ecosystem creation by local entrepreneurs and angels, the Thai government has finally gotten on board with the launch of a THB20 billion VC fund last year and a wide-reaching, if vague, start-up policy. SME Private Equity Trust Fund, for its part, will focus on tech sectors that have a direct impact on the growth of the national economy.

As a venture capital professor at Bangkok’s Chulalongkorn University since 2007, Abrams has had a front-row seat for the resulting renaissance of entrepreneurial spirit.

“Every year in my work in Thailand, I see more and more high-potential young entrepreneurs coming to us with exciting business plans, business ideas or companies that they’ve already started,” he says. “I can see both the volume and quality of these ideas are increasing steadily over time, and we’ve reached a tipping point where we’re going to see tremendous results from that over the next few years.”

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• Topics
• Southeast Asia
• Venture
• Financials
• Fundraising
• Thailand
• Financial Services