How this Thai VC is helping to build the future of blockchain financial solutions

It was only a few short years ago that things like contactless payments and ride-sharing apps were considered cutting-edge, revolutionary services. Now, they’re part of our everyday lives, and nary a second is spent thinking about how quickly these changes took place.

But the pandemic has forced us to rethink how we eat, shop, learn, and play. As a result, a variety of technologies are being rapidly developed to cater to and support these lifestyle changes and continue the fight against Covid-19. Startups have been leading the way in this regard, coming up with tools to help stop the spread of the virus, enable home-based learning, and digitalize traditional businesses, among other efforts.

But these firms can only do so much if they go about things on their own. To make a large impact, they need support and opportunities to scale – which is where corporate accelerators come in.

A “speed boat” for innovation in finance

It’s a mutually beneficial arrangement – traditional corporations have seen the value in collaborating instead of competing with startups. They tap into the agility and innovation of these companies, while offering resources and networks built over decades in return.

Take, for example, SCB 10X. Founded last January, the company is the digital technology investment arm of Siam Commercial Bank (SCB), Thailand’s first bank which was established in 1907. “SCB created SCB 10X as a smaller ‘speed boat’ that can move fast, help the bank to innovate and disrupt, as well as prepare the bank for the future, when the dynamics of the financial industry will be very different from today,” says Mukaya Panich, chief venture and investment officer at SCB 10X.

Mukaya Panich, chief venture and investment officer at SCB 10X / Photo credit: SCB 10X

The firm invests in early-stage startups – up to series C rounds – from all over the world and also helps with building technologies in some cases. It establishes joint ventures and partnerships with selected growth-stage startups as well.

As one might expect, SCB 10X’s focus at this point is finance-related – specifically, the possibilities that blockchain technology can enable.

“We feel blockchain as a technology today is at the same place that the internet was in 2000 – on the cusp of very significant development and with the potential for wide-ranging impact on different sectors of the economy,” Mukaya says. “Applications of blockchain to the financial industry is where the industry is seeing the most meaningful traction, and that is where I am spending a lot of time looking for investment opportunities.”

Within the blockchain sphere, SCB 10X is zeroing in on the field of decentralized finance (DeFi), recently launching a US$50 million fund that’s focused on the sector. According to Mukaya, the firm believes that, in the not too distant future, banks and other financial institutions will potentially be disintermediated, and counterparties such as lenders and borrowers will transact directly with each other via blockchain.

DeFi is seeing exponential growth. At the beginning of 2020, the total value locked (TVL) of all DeFi products was below US$1 billion, but now it is close to US$40 billion. User numbers have also increased from 100,000 to over 1 million users in the same period, explains Mukaya. TVL represents the value of assets in a system and is a metric that indicates how much a platform is being used by customers, similar to loans given out by a bank.

“There is a high chance that [DeFi’s] growth will accelerate further and we will see broader adoption, and SCB 10X wants to be ready and focused on that,” she says.

Providing all-round support

In October 2020, SCB 10X struck up a strategic partnership with Alpha Finance Lab, a Bangkok-based company that created an ecosystem of DeFi solutions, including credit and lending services. According to Mukaya, Alpha has seen its TVL grow from zero to US$1 billion in five months, making it one of the fastest-growing DeFi companies.

“Due to the fast pace of the decentralized finance scene, Alpha needs help to innovate as rapidly as possible before competitors catch up,” she says.

Innovating fast, in Alpha’s case, means bolstering its capabilities – a challenge for the firm considering its team consists of only five people. SCB 10X has been able to help in this regard: It has developers in its venture building team that can pitch in to help with building Alpha’s DeFi applications and other platforms. “SCB 10X is unique on this front, as we have an in-house development team that has very strong technical capabilities,” Mukaya says. “We are not only an investor but also a builder.”

Alpha Finance and SCB 10X team members / Photo credit: SCB 10X

The investment firm is currently helping Alpha to expand its network, introducing it to other investors in the blockchain and DeFi industries and promoting it in the media. Alpha’s founders were also invited to speak at SCB 10X’s DeFi Virtual Summit in December, giving the company more exposure.

Going beyond finance

SCB 10X isn’t limiting itself to the finance industry; it is also interested in innovations that are in the realms of health and wellness, the future of work and lifestyle, internet of things, and deep tech. It believes that these will be the key areas of disruption over the next few years.

For example, the company invested in Ohmnilabs, a robotics startup that has, among other projects, created telepresence robots that allow doctors and nurses to check in on Covid-19 patients without having to be physically present. These robots also connect families with loved ones who are confined to hospital intensive care wards. Ohmnilabs is currently broadening its product innovation and expanding from offering telepresence robots into autonomous robots as well.

Besides investing funds into the startup, SCB 10X introduces Ohmnilabs to other strategic investors and potential new customers. It also helps Ohmnilabs to bolster its sales staff, with Mukaya tapping into her network in Silicon Valley – where she used to work as an engineering lead in an early-stage startup that was acquired by Broadcom – to find enterprise sales experts to advise on sales and go-to-market strategies.

Leveraging established networks and expertise is a core value proposition of SCB 10X – the firm can make use of its parent company’s extensive customer base and experience in compliance and regulatory matters to scale startups.

“Ultimately, SCB 10X’s mission is to create long-term value through investing in exponential technologies, championing passionate entrepreneurs, empowering the long-tail underserved, and building successful partnerships,” Mukaya concludes.

SCB 10X was established in January 2020 with a “Moonshot Mission” to achieve exponential growth through technology innovations and investments beyond banking via its three arms: Venture Builder, Venture Capital, and Strategic Investment & Partnership.

Find out more about its work and get in touch on its website.

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.