What kind of startups are being sought out by SCG’s new investment arm AddVentures? Those who are ready to grow in leaps and bounds.

There’s been growing momentum for SCG, an 104-year-old Thai enterprise that started out first as a cement business, and widened into three business groups, investing in Myanmar, Vietnam, Singapore, Malaysia, Laos, Cambodia, the Philippines and Indonesia so that its presence now covers the entire ASEAN region.

Today, there’s plenty of competition from startups and new business models entering the market – that’s why large corporations such as SCG have adapted their strategies by moving towards Digital Transformation and adopting Lean Startup models within their own organization. One of the company’s primary tactics to strengthen itself was to establish Addventures by SCG – a subsidiary in the form of a Corporate Venture Capital (CVC) firm, to bolster the potential of startups around the world and enhance startup & tech ecosystems through its vast knowledge base, networks and customer base across ASEAN in line with Addventures’ vision and slogan: “You innovate, We Scale”.

Addventures’ investment will be divided into two courses of action – direct investment in startups and investment in other funds. Of course, it is important to maintain relevance to the three core businesses of SCG – cement and construction materials, chemicals and packaging. Therefore SCG plans to invest in three corresponding business groups which are Enterprise – Industrial – B2B, with the following sub-focuses in each sector:

Enterprise

• E-commerce Enablement
• Predictive Analytics
• Omni-channel
• Construction Efficiency Management
• SaaS (Software as a Service)
• AI (Artificial Intelligence)
• AR/VR
• Blockchain

Industrial

• Smart Manufacturing
• Robotics
• Automation
• Energy Efficiency Technologies

B2B

Marketplace Platform for:

• Construction Products
• Chemicals
• Packaging
• Industrial Supply
• Logistics

Addventures has set up the following selection criteria for funding of startups, which can be divided into three main factors:

• Proof of Concept – A startup that proves that it has an interesting idea and is likely to create a real product.
• Customer and Traction – A startup that is able to develop a system to fix existing problems and already has a way to test out its product or services or enough customers to attract investors
• Ready to Scale – Startups that are ready to grow in leaps and bounds.

Mr. Dusit Chaiyarat, CVC Fund Manager of AddVentures, added that AddVentures is an investment arm that looks at investing with outside companies and a channel through which startups can deal with SCG. Apart from the above criteria, the company also wishes to focus on customer deals.

"As we select startups to join us, if you pass the criteria, then we will invest and be ready to help you scale. We will focus on the startup investment in the Series A and Post Seed rounds. What we intend is to create a win-win situation on both sides – we do not see the need to make a quick win or see only financial return; it’s a long term game where we seek out a direction to grow together,” shared Mr. Dusit.

More information about AddVentures:

• 2017 is the first year that AddVentures was founded and has begun to seek out partners, create connections, and invest in startups in Thailand and ASEAN.
• 2018’s focus will be investment in global innovation hubs like Silicon Valley in the United States, Tel Aviv in Israel and Shenzhen in China.
• 85 million USD or 2-3 billion Baht is the budget that AddVentures is prepared to invest within the next 5 years.
• 1-5 million USD is the amount of investment that AddVentures will give per one startup per round of investment.
• 25-30 startups is the goal AddVentures has set for its investment, with the hope of investing in an average of 5-7 startups per year.
• 4-5 funds is the target that AddVentures has set for jointly investing with foreign VCs within 5 years.

Updates on first-year movements and perspectives on the Chinese market

Techsauce’s team asked what AddVentures hopes to see in the first year of its operation, including its vision and goals.

Dr. Joshua K. Pas, Managing Director of AddVentures, shared that we will most likely see AddVentures making one to three (1-3) Thai startup investments and investment in two (2) other funds. Additionally, from the experience garnered during their time on the road with the Techsauce Global Summit 2017 roadshow in many different countries over 6 months such as Indonesia, Malaysia, Singapore, Hong Kong and China, AddVentures has seen a wealth of startups in countries abroad with huge potential and variety. In terms of VCs, AddVentures’ plan is to focus both on investment based on financial returns only, and joint ventures with other VCs who focus more on strategic returns.

"We found that each ecosystem has its own advantages, for example, Silicon Valley will have a lot of new kids on the block, whereas Tel Aviv, Israel will have a lot of hardcore technology and therefore deep-tech has developed very well there. But if in the ASEAN region, we primarily look at problem-solving and taking various methods and adapting them to suit each country,” he shared.

Mr. Dusit added, regarding the Chinese market which AddVentures was able to visit during the roadshow, that startups in the Chinese market are very competitive. Big brands like Alibaba, Tencent and Baidu are also very strong. Any startups that these companies invest in can be scaled.

In the ASEAN region, Addventures will primarily look at problem-solving and taking various methods and adapting them to suit each country.

“We see Chinese business models as being very interesting, but were we to bring them to use in our home country, we would definitely need to make some adjustments. If we compare ourselves with the US, Israel and China, the country where consumers behave most closely to us is actually China. So whatever works and is applicable in China and makes an impact there will soon come to us. That’s why we’re looking at China as a leading indicator for everything. In particular, we’ve seen that in China there is a huge amount of e-commerce at a global scale, followed by logistics and e-payment, which are foundational for e-commerce,” shared Dr. Joshua.

He closed by adding, "We see the Chinese markets as being very attractive in some aspects, especially for studying and performing market research. They’re also interesting places to find VC partners for ASEAN markets.”

For those who are interested to learn more about a big organization’s adaptation strategies, and how a big organization can help to strengthen the startup industry and grow together in leaps and bounds, Dr. Joshua K. Pas is one of the featured speakers on the Techsauce Global Summit 2017 stage. In his keynote speech, he will address the topic, ‘The NEW Industrial Revolution: How Corporate Giants Must Transform With the Industry – And How Startups Can Help’.

Also within the same event, Dr. Joshua will join a panel on ‘Leading Digital Transformation: Re-engineering organizational culture, mindset and governance for the Exponential Age’ with Yong Chern Chet of Ananda Development, Alvin Ng from GE Digital, Ben Richardson from PwC and Jeffrey Char from J-Seed Ventures.

Mr. Dusit Chairat will also feature in a panel on ‘Corporate Innovation: How Opening Up is a Win-Win Scenario’ with Oko Davaasuren from Techstars, Thakorn Piyapan from Krungsri and Champ Suthipongchai from Creative Asia.   

See a full agenda of Techsauce Global Summit at summit.techsauce.co/agenda.

Aside from this, AddVentures by SCG will open up a ‘Scaling Platform’ stage especially to connect with and share advice and knowledge with startups and interested persons, and also to present some cutting-edge innovations from foreign Industrial startups within Techsauce Global Summit 2017 at the New Era Tech Showcase Stage in the hope of presenting some interesting case studies to alert startups in ASEAN to the immediate possibilities at hand.