Fund focus: ASEAN finds new inroads to global tech

Supachai "Kid" Parchariyanon (pictured) helped set up Bangkok-based consulting firm Rise in 2016 with a counterintuitive take on impact investment in Southeast Asia. The idea is to help the most powerful and established companies in the region make even more money.

Rise effectively plugs its network of 2,000 global start-ups into its network of 400 Southeast Asian corporates and multinationals, helping them increase revenue, which is counted toward regional GDP as impact. Parchariyanon said Rise has created USD 1bn of GDP impact to date and aims to drive 1% of ASEAN's total GDP. That figure would be about USD 30bn.

Rise monetises its corporate clients, not start-ups, and does not invest. But by 2018, the insights gleaned from its consulting-accelerator model were leveraged with the creation of an investment unit called SeaX Ventures, a play on Southeast Asia Exponential Ventures.

That year, a debut fund of USD 10m was raised and it has since gone on to generate an IRR of 300%. Fund II closed last week at USD 60m, beating a target of USD 50m.

LPs in the latest vintage are largely Thai corporates, including beer giant Singha, oil producer PTT, property developer Central Pattana, hospital chain operator Ramkhamhaeng Hospital, newspaper publisher The Vacharaphol Company, printing industry supplier TKS Technologies, and furniture manufacturer Modernform.

Indeed, Parchariyanon refers to SeaX as "corporate venture capital-as-a-service." The VC firm provides under-digitised companies in Southeast Asia with access to global start-up talent; about 80% of its investments are in the US. It also leverages Rise resources to help portfolio start-ups pilot new technologies with LPs.

"If they're not very late stage, a lot of start-ups won't take money from corporates because they're afraid they'll block them from doing business with competitors. We are neutral. We can match start-ups with the whole industry landscape without conflict of interest," Parchariyanon said. "That's why we have been able to invest in three unicorns."

These unicorns are all in the blockchain space: infrastructure provider Solara, crypto exchange Bitkub, and decentralised governance platform Band Protocol. Tokenised – and therefore highly liquid – businesses of this kind allow for fast exits, a phenomenon that fuelled the new fundraise. Bitkub and Band Protocol were Fund I deals.

Deep tech is core to the overall strategy. Fund II will make investments of up to USD 5m in areas that corporates have difficulty doing in-house and remain relatively underdeveloped in Southeast Asia. In addition to blockchain and Web3, these include food technology, life sciences and biotech, artificial intelligence, robotics, and internet-of-things.

The key to SeaX's model – which Parchariyanon considers globally unique – is in the ability to secure sought-after investments in competitive, expensive start-up markets with modest resources. This is partly a matter of having an LP base that helps the fund punch above its weight and partly a matter of improved visibility on business sector demand for technology.

"Out of the 650m people in Southeast Asia, our corporate clients are serving more than 100m as customers. So, if a start-up wants to be global, we can help for sure. We have a plus that other VC funds in the US cannot offer," Parchariyanon said.

"If start-ups are working well with corporates, we will get the feedback from the corporates themselves, which then enables us to make better investment decisions. That's the ecosystem we've built."

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• Topics
• North America
• Southeast Asia
• GPs
• Fundraising
• Venture
• Technology
• USA
• Thailand
• seed
• corporate venture capital
• blockchain
• Cryptocurrency
• Web 3.0
• metaverse