Trading conglomerate Loxley Plc has entered into a joint venture with Singaporean private equity fund TIH Ltd to capitalise on Thailand's high-growth tech startup investment opportunities.
K2 Venture Capital, a 51:49 venture between Loxley's IT arm Loxbit and TIH, is spending 150 million baht to invest in potential tech startups this year.
The venture is part of Loxley's three core strategies to focus on expanding into cloud computing, e-payment and venture capital to sustain its revenue growth in the digital transformation era.
"Loxley is on the verge of reshuffling its management and organisational structure in order to bring in fresh blood and explore new business opportunities," said Vasant Chatikavanij, vice-chairman of the executive board at Loxley.
Loxley has established three new IT subsidiaries: Cloud Serve Asia Co to provide private cloud-based services, including big data analytics; Loxley Orbit Co for providing e-payment processing; and K2 Venture Capital for operating tech venture capital businesses.
Mr Vasant said K2 Venture Capital will increase its investment budget to 700 million baht by year-end.
The venture firm will operate independently. But he said Loxley can provide marketing support and digital infrastructure to those tech startups that the company has invested in.
Mr Vasant said Loxbit can expect to access innovative products from those startups, enabling the company to grow its business with no investment requirements for research and development.
Stanley Wang, director of K2 Venture Capital, said TIH has diversified from traditional investment to venture capital for the first time as the company sees exponential growth opportunities in this field.
"Thailand is a popular regional venture-capital destination, apart from Indonesia and India, due to the country's strong digital and physical infrastructure, digitally-savvy users and strong mobile and social media usage," he said.
More importantly, the Thai government's policy to promote startups, the planned development of Thailand 4.0, the national e-payment scheme and legal frameworks have all encouraged both local and foreign venture capitalists to invest in Thailand.
Mr Wang said K2 Venture Capital will focus on investing in high-return tech startups in the fields of financial technology, insurance, big data analytics, machine learning, Internet of Things, block chain applications, precision agriculture, vehicle telematics and electronic trading platforms.
Mr Wang said the venture will invest in seed and Series A round financing to begin a new startup company at the expansion stage, with investment to be limited to 30 million baht per company.
K2 Venture Capital made its first investment in MoneyTable Co, a startup that provides peer-to-peer lending with better credit scoring models to predict the applicants' qualifications.
"We expect to invest in at least five or six companies within the next twelve months," said Mr Wang.