InVent, the corporate venture capital arm of Thai-listed Intouch Holdings, is scouting for startups that are aligned to the group’s strategy of becoming a technology enabler rather than just a pure telecom provider, according to a top executive.
Intouch owns stakes in Thailand’s largest mobile phone network Advanced Info Service Pcl (AIS) and satellite operator Thaicom Pcl.
The new strategy will see the CVC firm diversify its investments into areas such as healthtech, edtech, fintech, insurtech, smart buildings, agritech, machine learning, business-to-consumer payment, cybersecurity and other sectors that will benefit from the 5G technology.
“We always consider the strategic value and financial return. The former will be more focused in the next years as we are entering into the 5G era. We do see the importance of our group to become a technology enabler, rather than a pure telecom provider. Thus, InVent, as a CVC vehicle, will approach to seek startups that would complement our group’s jigsaw,” InVent head Narongpon Boonsongpaisan told DealStreetAsia.
Startups related to the group’s 5G technology development will remain the primary focus of InVent.
Early this month, the CVC firm announced investments into Datafarm, a Thai cyber-security startup providing IT audit services, and Swift Dynamics, another local startup that uses IoT technology to connect multiple devices to the cloud.
“The two companies are leading startups in Thailand’s cybersecurity and IoT sectors while their technologies will support corporates to strongly step into the fully-digitised 5G era,” said Boonsongpaisan.
Going forward, the CVC firm will expand its investment scope and also consider investing in a VC fund, as well as initiate a venture-building programme, he added.
The CVC is also upping its focus beyond the local market. Late last year, it joined the round of Japanese interactive video solution provider Paronym and has signed the term sheet with another regional UGC-creators (user-generated content) management company. “Realizing that the ecosystem would face the challenge and the Thai market alone might not be as attractive, we also stepped outside to seek great overseas startups,” he added.
InVent too felt the impact of the COVID-19 pandemic that turned investment firms across the world more cautious and slowed down the pace of deal-making. A slowdown in both corporate and consumer spending, together with heavy cost-cutting, has resulted in toned-down FY20 figures for most of the startups in its portfolio.
The InTouch CVC arm provided special funding on a case-by-case basis and also helped portfolio startups find new investors for the next rounds.
Last year, InVent invested 200 million baht ($6.33 million) in Conicle, Smart Building Swift Dynamics, and points exchange platform ChomCHOB. It also exited one company (Wongnai) and has continued to deliver an IRR of 29% from all exits thus far.
To date, the investment firm has invested in more than 20 startups covering a range of industries and technology. It has exited seven companies so far, according to its website.
“Going forward, Intouch as a whole aims to maintain decent NAV growth to shareholders. Apart from contributions from AIS and THCOM, we will continue to make investments in startups in the region, focusing on strategic value to the group,” Boonsongpaisan emphasised.
By 2025, InTouch aims to invest in three foreign funds. Much of the investment could last about 10 years with an expected internal rate of return of at least 10%, Bangkok Post reported.