Thailand: Bualuang Ventures allots bulk of capital for SME investment

• Apr 18, 2017

Bualuang Ventures, the venture capital company of Bangkok Bank (BBL), is mainly focused on investing in local small and medium enterprises (SMEs) unlike its banking peers, who are focused on financial technology (fintech) firms.
More than a half of the venture fund firm’s capital is expected to be allocated for investment in SMEs, said Panukorn Chantaraprapab, BBL’s vice-president and Bualuang Ventures’ director. The rest of the capital will go to startups engaged in both fintech and other sectors.
Bualuang Ventures’ investment strategy is a departure from the trend seen in rival banks, whose investment policies target fintech companies almost exclusively.
Mr Panukorn said Bualuang Ventures is in talks with several companies and is set to put money into 3-5 companies this year.
It will encourage entrepreneurs to seek listing on the stock market to expand when the fund exits. BBL, the country’s largest lender by assets, set up Bualuang Ventures in June last year. It has a registered capital of 2 billion baht, of which 500 million is paid up, and Bualuang Ventures has yet to invest in any companies.
The venture capital firm will gradually consider investments, he said, noting that Bualuang Ventures will provide both financial and non-financial assistance to help foster SMEs in the long run.
According to Bank of Thailand regulations, the maximum period for banks’ venture capital investment is seven years, but a cap on the joint investment ratio in companies is not required.
Bualuang Ventures will consider SMEs on a case-by-case basis and due diligence will be conducted before making investment decisions, said Mr Panukorn.
The venture capital firm, however, has set asset size, and annual sales or revenue of targeted firms for internal analysis.
“We want to help local SMEs build sound fundamental base and grow sustainably in the long term. The fund will concentrate on quality to ensure that such joint investment firms will survive,” he said.
Silicon Valley data has found that only 10% of total fintech startups survive after venture capital funds exit. Bualuang Ventures aims to see a higher rate of success.
The venture capital company is targeting both existing SME customers and non-clients for investment.
BBL shares closed yesterday on the Stock Exchange of Thailand at 186.50 baht, unchanged, in trade worth 640.7 million baht.

Source: http://www.bangkokpost.com/business/news/1233910/bualuang-ventures-allots-bulk-of-capital-for-sme-investment