Krungsri Finnovate is raising a US$100m fund to power Thailand’s next unicorns

Thailand’s startup ecosystem is on the up. Fueled by robust digital infrastructure, a youthful, internet-savvy population, and growing domestic demand for digital products and services, the country’s startups raked in over US$495 million in disclosed funding in 2020 alone, up from nearly US$104 million in 2019, despite the blow from the Covid-19 pandemic.

Photo credit: john6863373 / 123RF

The country also saw its first unicorns in 2021, with logistics provider Flash Express and fintech firm Ascend Money both hitting billion-dollar valuations.

As the country works toward having more unicorns in its stable, it’s corporations are stepping up to spur the growth of startups even further. Unlike most of Southeast Asia, where venture capital funding makes up a significant chunk of investments, 80% of startup funding to Thai startups comes from corporations.

One of the firms looking to foster the next wave of tech companies in the country is Krungsri Finnovate, the corporate venture arm of Krungsri, one of Thailand’s largest banks. It plans to do this via Finnoventure Fund I, a US$100 million startup private equity trust fund.

Driving more investments

Having backed companies such as Flash Express, payments firm Omise, and regional super app Grab, Krungsri Finnovate is no stranger to startup investment, and it saw an opportunity to bridge a gap in Thailand’s investment scene by facilitating more investments into startups.

“On the banking side of Krungsri, we had both corporate customers and high-net-worth individuals asking us about how they could invest in startups, but not knowing how,” says Sam Tanskul, Krungsri Finnovate’s managing director. “At the same time, we were also looking at how else we could support new companies on top of just investing off our own balance sheet.”

Sam Tanskul, managing director of Krungsri Finnovate / Photo credit: Krungsri Finnovate

That vision led to the launch of Finnoventure Fund I, which will focus on startups across the fintech, ecommerce, and automotive industries. In particular, Tanskul and his team are looking to invest in startups that are exploring new technologies such as blockchain and decentralized finance, as well as those that are developing effective solutions to address pain points that consumers face.

The fund could also back logistics firms and ecommerce enablers supporting the rise of online shopping in the region, as well as electric vehicles and shared-vehicle startups. Krungsri Finnovate is also looking closely at overlaps in these areas, such as alternative financing solutions for automobiles, online car marketplaces, and insurance products.

The fund aims to mostly invest in series A and later-stage startups that are based in Thailand, though it is looking at other firms in Southeast Asia as well. Krungsri Finnovate is currently looking to bring in eight corporate partners to participate in the fund, alongside ultra high-net-worth individuals who would come in as angel investors

Creating synergy

Aside from focusing on particular verticals, the firm is also looking for passionate founders with regional – and even global – ambitions, who could become valuable strategic partners for Krungsri and the investors it brings on board. This would offer these startups access to a wider pool of potential customers, helping them grow even further and develop better products.

We’re not just investors, we want to ensure that it becomes a partnership that benefits everyone involved.

“Our investment philosophy is to ensure that there is a synergy between the companies we invest in and the partners working with us in Finnoventure Fund I,” explains Tanskul.

He points to Krungsri Finnovate’s investment in Thai wealth management startup Finnomena as an example of this investment thesis in action. The venture firm led Finnomena’s US$3.2 million series A round in 2017 and participated in its recent series B fundraise.

At the same time, Krungsri worked with Finnomena to integrate the latter’s robo-advisor technology into the bank’s own financial advisory services, enhancing its wealth management capabilities and opening doors for Finnomena’s expansion in Thailand and other parts of Southeast Asia.

“We’re not just investors, we want to ensure that it becomes a partnership that benefits everyone involved,” Tanskul adds.

Building up an ecosystem

Finnoventure Fund I is just the beginning of Krungsri Finnovate’s plans to further fuel the growth of the country’s tech companies. Tanskul anticipates that new funds will come up alongside more targeted funds that will look to invest in specific technologies or developments in the years ahead.

Krungsri Finnovate will look to continue supporting the ecosystem’s growth through other initiatives such as its business matching program Meet The Angels. It will also encourage more strategic partnerships between startups and Krungsri’s various business units to drive more innovation.

Ultimately, Krungsri Finnovate intends to ensure that Krungsri, as a regional bank with aspirations of meeting consumer needs throughout Southeast Asia, will be able to continually evolve and transform in line with new customer demands through collaborations with new companies and investments in new technologies. On a broader scale, Tanskul envisions that Krungsri Finnovate will play an important supporting role in helping Thailand’s startups grow bigger and become regional unicorns in their own right.

“In Indonesia, young graduates from the universities don’t want to work for traditional companies, they want to work for the Gojeks and the Tokopedias,” he says. “We want to see the same thing in Thailand, that when our youth graduate, they want to work for our own Thai startups.”

Krungsri Finnovate is the corporate venture capital arm of Krungsri (Bank of Ayudhya). Its upcoming Finnoventure Fund I is an investment opportunity with access to business information and partnerships with startups who are rising stars in the region.

Learn more about Krungsri Finnovate on its website here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.