“The world of family finance in Southeast Asia has become very vibrant with technology and tech investing thanks to recent startup successes,” said Vishal Harnal, managing partner of 500 Startups Southeast Asia, who was an early investor in ride-hailing giant Grab and online marketplace Carousell. “There is a lot more family money coming in to achieve this, and the pandemic has accelerated this race.”
Conglomerates which have powered Southeast Asia’s economy for many years now face difficult challenges as governments proceed to struggle to contain Covid-19 infections. Last month, the Asian Development Bank lowered its 2021 growth outlook for the region to three.1 percent, saying “developing Asia stays vulnerable” to the pandemic.
‘Hidden investments’: Chinese money flows into Indian technology as IPO boom
‘Hidden investments’: Chinese money flows into Indian technology as IPO boom
Among the leaders within the race is Charoen Pokphand Group Co., a 100-year-old Thai conglomerate operating within the agri-food, retail and telecommunications markets. The group’s senior chairman is Dhanin, head of Thailand’s richest business dynasty.
Southeast Asia is entering a golden era of transformation as corporations modernize with advanced technologies and recent business models
“CP Group actively pursues innovation and explores advanced technologies such as robotics, logistics, cloud and other digital technologies,” said Yue Jun Jiang, chief technology officer of CP Group. “Southeast Asia is entering a golden era of transformation as corporations modernize with advanced technologies and new business models, and the pandemic has further accelerated digitalization.”
Plug and Play Tech Center, a Sunnyvale, California-based early-stage investor that has backed greater than 20 unicorns including PayPal Holdings Inc., has signed on with greater than a dozen partners in Southeast Asia, most of that are family-controlled groups . These include Filipino energy construction conglomerate Aboitiz Power Corp. within the Philippines, Thailand’s CP Group and Indonesia’s Astra International.
While rising valuations could also be tempting, groups pursuing a technology strategy face some risks.
Why the rise of Singapore tech giant Sea is making waves across Southeast Asia
Why the rise of Singapore tech giant Sea is making waves across Southeast Asia
Early stage firms are inclined to spend a whole lot of money before they show any signs of gaining traction of their business. They also require way more support and guidance than established corporations can offer. In addition, conglomerates also need to jostle with investors with deeper pockets and longer experience, reminiscent of treasury funds and enterprise capital funds.
However, many family businesses are usually not afraid of challenges. Some have began pilot projects with tech startups to take a position in those with promising technologies. They are searching for offers and partnerships covering a wide selection of products, from production automation to sustainable innovation, in addition to fintech, health technologies and electric vehicles.
“They are looking at what will impact their business, such as the pandemic, and they need to come up with new ideas,” said Shawn Dehpanah, executive vp of Plug and Play and head of innovation and company investment for Asia Pacific. “These large corporations are now the backbone of accelerating innovation among startups.”
Even Thailand’s state-owned oil and gas company PTT Pcl doesn’t need to be left behind. It signed a partnership with Plug and Play, and this month one among its units joined forces with 500 startups to create a $25 million fund to take a position in early-stage firms in Thailand and Southeast Asia that the group might help expands its reach.
Meanwhile, CP Group unit True Corp., Thailand’s No. 2 mobile operator, has spent about $17 million to construct the most important technology park in Southeast Asia, which now houses a wide range of foreign and domestic ventures in addition to local branches of established tech giants, reminiscent of Google and Mitsubishi Corp.
The tech park, which attracts on Silicon Valley’s history by equipping the space with sports and entertainment facilities and adding enterprise capital pitch sessions, is anticipated to expand next 12 months.
“I was impressed by the meeting with the patriarchs of the family,” said Lauria, whose enterprise capital firm can also be a partner of True Digital Park in Bangkok. “They are asking the right questions about how to build and grow their businesses with technology.”
