HOW CVCS ARE ENABLING LOCAL FIRMS TO EXPAND THEIR VISION TO GLOBAL MARKETS

The mindset of most Thai start-ups is to focus on Thailand. This is just fine. But if they want to grow to a unicorn, the mindset needs to change a little bit. They need to think about how would they take the next step, to the Philippines, to Indonesia, and how they would go about it. Mentors, people who have experience of growing overseas, will become increasingly important to the Thai ecosystem in the coming years. 
It is about being smart, how to launch a start-up, go regional, or go global. There are many ways they can do it. They can test to see what works or does not work, to try out different approaches. If they do not understand the culture, Innov8 can help by introducing them to people who can help add value, said Edgar Hardless, chief executive officer of Singtel Innov8.
"Now is the time for some Thai start-ups to look to go regional, and hopefully go global. If possible we will help those Thai start-ups, along with AIS, to make that happen," said Hardless.
Another challenge in Thailand and the SEA start-up ecosystem is the number of experienced mentors. 
Most start-ups in SEA are in seed and series A type companies. Some are bigger so they need more growth capital. They have enough investors and funding available for what is called the growth stage, series B series C. 
In Thailand, there is quite a lot of seed and series A funding. Start-ups in Thailand now need growth capital.
"It is important to make sure that Thailand's ecosystem is well connected to these regional investors," said Hardless.
Innov8 has a large investment range - from US$100,000 (Bt3.4 million) up to $20 million (Bt679 million), so we cover seed to growth stage and late stage. 
"Our perspective at Innov8 is to support the whole Singtel Group. We are looking for capability that could be useful not only in Thailand, but also in the Philippines, Indonesia, and India. We are looking for solutions that could be across the Asia region. We are not looking at specific market focused start-ups," said Hardless.
Singtel Innov8 is one of the largest corporate venture capital (CVC) in Singapore. They encourage a lot more Singaporean corporates to engage. How they engage is different, some have set up angel funds, some have set up corporate accelerators, and some have set up an innovation lab. 
"I think corporates can add a lot of value and help to grow a start-up ecosystem, especially in SEA. A corporate like AIS is also important to the community and the market. They have a lot of ability to provide access to market and customers, so many things they can provide to help start-ups," said Hardless.
Hardless said that innovation is important to all vertical industries. They all recognise that today a lot of the true innovation is no longer being developed by large companies, but rather by small and nimble start-ups. 
Technology trends are artificial intelligence (AI), virtual reality (AR), and machine learning (ML). It is also RPA (robotic process automation).
"I think it is recognised that all corporations now think that they need to find a way to engage with these start-ups," said Hardless.
Ultimately, start-ups may come forward with the solution. But the large corporates have the channels to market, along with the access and credibility that can help take technologies to other levels. Corporates recognise that. Singtel long ago recognised that it is important to understand what new technology is coming down the road and how to leverage them to provide better customer experiences, said Hardless.
However, there is a fundamental difference between venture capital (VC) and corporate venture capital (CVC), he said. Corporate capital is driven by financial returns; though they have a number of investors who expect the venture capital's drive, today it is primarily financially driven. CVC normally has the strategic angle, linking back to the strategy of the corporate they represent. If start-ups have good CVCs on board, they can access senior corporate management and strategic investors.
CVC can bring value to start-ups beyond the money. It is also about access to the parent and what the parent can provide in term of providing opportunity to reach the market. If start-ups in the US, for example, are thinking of expanding outside the US, having an investor who understands Asia, who has local knowledge, will be very useful. 
Innov8's portfolio includes three unicorn start-ups with more than a billion US dollars and more than 10 successful exits - four of them went to IPO while the rest were acquired by companies.
"I do not think you can name many corporate VCs that potentially have the same track record," said Hardless. "Once again, we do not focus on trying to create the unicorn start-ups, but we focus on identify the interesting companies that can help the Singtel Group's strategy. Of every 10 investments, you can expect half to fail; of the other half, one or two are very good, successful, and another three might return your money. VC is a very risky business; not everything is going to be a success." SingTel Group has over 600 million mobile subscribers and footprints in India, Thailand, Philippines, Indonesia, and Australia.
Hardless noted that InVent is Intouch's corporate venture arm, while Innov8 is the corporate VC that invests with many other VCs. InVent is a very important partner of Innov8 for the Thai ecosystem; they are the most active investors in Thailand. 
"So, InVent represents another VC that we work closely with to look at co-investment opportunity. We have the co-investment already with the InVent. In terms of exposing some Thai start-ups to the regional opportunity, we would encourage some VCs in regional and we will see how we can help."
From Singtel's perspective, they are looking for the next generation of mobile connectivity, digital capability, and the Silicon Valley represents the largest innovation ecosystem in the world. There is obvious sense to have the team based there. Israel is also particularly important at least from a telco perspective because they are strong in network technologies, they are also very strong in cybersecurity, and enterprise cloud solutions, which are all areas Singtel is particularly interested in. 

Important role of the government 
The Singaporean government has been very supportive of the start-up ecosystem, has provided ways to encourage investors to invest. They have done matching, where VCs put in money and the government puts in money to help reduce the risk.
Another way the Singapore government helped is to provide a lot of grant money for start-ups to develop their product. The Singapore government has also provided amazing infrastructure. Now they are developing the infrastructure for Internet of Things, as well as providing open API and access to data sets. 
All those ways have proven to be very good in terms of helping start-ups grow and encouraging them to take advantage of opportunity. Yes, funding is the very important piece, and an experienced pool of mentors is very important as well. Singapore is building the mentor pool but also encouraging a focus on activities in Singapore and in SEA.
The Singapore government has made it easy by providing start-ups the opportunity to do the testing and validating. The Monetary Authority in Singapore has a chief technology officer position, and has assigned money to support the developments of financial technology (Fintech) in Singapore. The government also decides which technology areas are important to Singapore, including cyber security, Fintech, and "smart city" start-ups - and focuses their support to those areas. 
"I just figure out what the government's priorities are, as the way they want to put the effort to attract more activities," concludes Hardless.