From venture building to investments: how SEA’s corporations are innovating

When you think of innovation, you would probably think of startups that are quick to roll out new solutions. Corporations might not even come to mind because they’re usually seen to move slowly.

It might come as a surprise, then, that large companies are driving an increasing amount of innovation, particularly in the Southeast Asian tech ecosystem.

I recently dove into the Stryber Corporate Venture Building Report for the region to take a closer look at the innovation happening within Southeast Asia’s corporations.

As the report puts it, there are three main ways big firms are innovating: corporate venture building, corporate venture capital, and the more traditional mergers and acquisitions. While M&As are well understood, the two other methods are relatively more nascent and worth exploring in detail.

Image credit: Stryber

What is corporate venture building?

I consider corporate venture building a bit like the startup accelerator model but for corporations. And as we all know, large companies are typically slow so they need some acceleration.

Corporate employees are not normally accustomed to the pace and intensity of a startup. To foster innovation, particularly regarding new business models, large companies need to do it outside their normal construct.

One option is to have an in-house team focused on the process, or what Stryber refers to as internal venture building. Examples of this would be Standard Chartered’s SCVentures or Bank of Ayudhya’s Krungsri Finnovate.

Another option is to use an external venture building partner like Stryber or Leap by McKinsey. This is the usual setup of corporate venture builders or CVBs.

According to the Stryber report, CVBs “provide a ‘turnkey’ implementation for startups and usually work for a fee and/or receive co-ownership with their corporate clients.”

In Southeast Asia, there appear to be 56 venture builders in total as of the end of last year, with CVBs comprising 34 of them.

Image credit: Stryber

What is clear is that this model seems to be growing and working globally. Per the Stryber report, there were 13 venture studios founded globally from 1995 to 2000. The figure for 2016 to 2021 was 723.

Corporate venture capital

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