Krungsri Finnovate (KFIN), a corporate venture capital arm under Bank of Ayudhya (BAY), launched a startup fund on Thursday for high net worth investors interested in tech companies.
The move aims to support the growth of local tech startups in the long term, said Sam Tanskul, managing director of KFIN.
Finnoventure Fund I claims to be the first startup private equity trust fund in Thailand and Asean to provide an option to institutional and high net worth investors under the regulation of the Securities and Exchange Commission, he said.
The size of Finnoventure Fund I is set at 3 billion baht with a 10-year maturity, with investment focused on Series A startups, said Mr Sam.
Investment is scheduled to begin in November this year. There are more than 10 local tech startups in the pipeline for investment, and the company expects around five to be in the first round in November, he said.
Mr Sam said KFIN concentrates on three sectors for tech investment: fintech, e-commerce and automotive.
Initially the company set the investment ratio at 40% of the total fund size for fintech, with 30% each for the e-commerce and automotive sectors. The ratio can be adjusted as deemed appropriate.
KFIN plans to allocate 60% of the total investment budget for local tech startups and 40% to regional startups.
Asean has been progressing in tech startup development and the company wants to focus investment on Singapore, Indonesia, the Philippines and Vietnam, in accordance with the regional networks of BAY and Mitsubishi UFJ Financial Group (MUFG), the bank's major shareholder, he said.
Mr Sam said Thailand has a lot of ultra high net worth investors and to join the fund they require a minimum deposit of 50 million baht, or a minimum investment of 25 million, or a minimum fixed-asset value of 70 million.
BAY has many customers in this segment, he said.
"Apart from the return on investment in Finnoventure Fund I, investors will know they are helping to support the development and business expansion of local tech startups," said Mr Sam.
"In addition, these new S-curve businesses should facilitate the country's digital economic growth post-pandemic and in the longer term."
Since starting operations four years ago, KFIN has partnered and worked with 63 startups. The company's investment in tech firms tallied an average return of 20.8% per year, he said.