AddVentures’ focus will be strategically aligned with that of its parent company. SCG is Thailand’s largest industrial conglomerate, operating in sectors that range from chemicals and construction materials to packaging and energy efficiency.
Dusit Chairat, corporate venture capital fund manager at SCG’s digital transformation office, said: “The aim of AddVentures is to invest in startups and venture capital funds in three verticals – industrial, business to business (B2B) and enterprise. We also want to enter into commercial deals with startups and technology partners.
“Overall, the mission we are trying to accomplish is to bring in some information in order to scale up the corporate.”
While AddVentures had yet to make its first investment at the time of writing, Chairat said there were a handful of startup investments in the pipeline, and the fund was expected to have committed to a number of third-party venture capital funds by the end of the year. As well as local companies, the businesses AddVentures is focusing on will be those from markets such as the US, Israel and China which have the potential or desire to move into Southeast Asia.
Within the industrial vertical, the fund is looking for firms active in areas such as smart manufacturing, robotics and automation. In the B2B sector, AddVentures is keen to back businesses dealing in construction products, chemicals and logistics. And the fund also wants to work with enterprise specialists focusing on the likes of e-commerce enablement, predictive analytics and construction efficiency management.
By helping to accelerate and scale up innovations and technology in sectors such as these, AddVentures aims to help transform SCG’s existing businesses and put it in a better position to respond to market disruption from new technologies and smaller competitors.
From an investee’s perspective, Chairat highlighted a number of potential benefits of working with AddVentures.
“First, investee companies will be able to take advantage of our resources,” he said. “SCG has a long footprint in Southeast Asia, which could be utilised by the entrepreneur.
“A second benefit is the industry that we are in. It can be particularly hard for startups to enter areas such as industrial and B2B, so we are in a good position to provide some expertise and some introductions.”
Chairat added that entrepreneurs and startups could also exploit SCG’s market network. “We have a large number of customers in our value chain. In our three core business units – chemicals, packaging, and building materials construction – we have a long value chain, and in each part of each node there are a lot of people that we are in contact with. They are our customers and suppliers, and our investee companies can access them.”
AddVentures’ five-year plan is to make early-stage investments in 25 to 35 startups and back as many as five VC funds. Chairat said that, because the VC ecosystem in Thailand was relatively undeveloped compared with economies such as Singapore or even Indonesia, corporate venturing projects such as AddVentures had a much more important role to play in financing startups and encouraging innovation and new technology.
“The Thai government has good intentions when it comes to promoting small businesses and startups,” he said. “But there is certainly room for improvement.”