Strategic partnership from VC
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Group changes its role to push young companies to new heights
Venture Catalyst Group has changed its role from being only a local venture capital fund assisting technology entrepreneurs to grow their businesses to becoming a strategic partner to drive the ecosystem of tech start-ups.
Jay Jootar, founder and CEO of VC Group, said last week that VC Group would look for tech start-ups with potential, then invest in them and incubate them. After the start-up can be scaled up, VC Group will look for new parties to invest in the company and spin it off.
“In a few years, we plan to spin off two more companies that are related to cloud computing. One is about a cloud client and the other is about cloud infrastructure,” he said.
As a venture capitalist for a decade, Jay said the tech start-up ecosystem is now growing.
The ecosystem consists of a pool of technical talent, investors and entrepreneurs.
“Normally, there are two main investors in tech start-ups. They are individual investors and financial institutions. There are two main models of investment. The first is to invest with funding and second is to invest with technologies,” he said.
However, the venture capital model in Thailand is still different from the West. Investors in Thailand are mostly concerned about value investment and profit rather than technology innovation.
Meanwhile, there are few tech entrepreneurs in Thailand and most of them are system integrators and made-to-order software developers rather than innovators that can come up with their own products and services with their own intellectual property.
“In Thailand, we have a lot of technical talents and investors. But we still lack tech entrepreneurs. VC Group is bridging the gap between them with our skills, resources and efforts,” he said.
VC Group aims to build tech entrepreneurs for the ecosystem. The company will incubate companies by recruiting both talents for their technical teams, such as programmers, engineers and systems engineers, and tech entrepreneurs who will be assigned as project managers to turn product development into a business.
“In Thailand, we have technical talents and we have investors. There is a gap between these groups. We need the ‘tech entrepreneur’ with technical skills and the ability to run tech as a business. They have to work with all stakeholders including the technical team, customers or users, and business partners or suppliers.
“So, the thing we do is to recruit technical talents to train them to become entrepreneurs. The tech entrepreneur is the missing piece in growing tech start-ups in the long run,” he said.
To build the pool of tech entrepreneurs, instead of looking for new tech start-ups and injecting funds in them, the company will recruit technical talents to work with the company and give them training and real practice on both sides of technical skills and coordinating and management skills.
“In a few cases, we also invest money in tech start-ups,” he said.
The group runs four core businesses – embedded systems, cloud infrastructure, cloud applications and telecom systems.
The embedded system business has developed a cloud client called Penta Box that is set to replace dumb PCs as a part of the IT solution offered to corporate users. It has joined with Foxconn Technology Group to set up Power-All Venture to develop Penta Box to sell through distributors worldwide.
The company also develops cloud platforms to co-provide with Internet data centre service providers to provide cloud systems for customers across industries and sizes of businesses.
“We are also working on cloud application development. Due to the rapid growth of mobile devices that drives huge demand for personal clouds, we will offer such a service for them this year,” he said.
The firm is also a partner of telecom service providers to provide the system for making telecom systems with quality service.
“We have done this for two years. We have some customers in the United States. We work through our partners,” he said.
These four core businesses play a role as the place for technical talents to practice, join in and be incubated until they are ready to be tech start-ups. VC Group then will transform itself to being a strategic capital company to spin them off, fund them and scale them up to become sustainable tech businesses.
