Thai SME VC Fund

A venture-capital fund worth 25 billion Baht (roughly USD$ 757M)  will be set up to invest in SMEs with high potential in Thailand. The cabinet has already approved establishment of the SME fund and the first 500 million baht likely will be injected into it in February.

Finance Minister Sommai Phasee said: The fund will invest between 5% and 50% of the registered capital for firms in agriculture, industry, technology and value-added innovations. He said SMEs contributed to more than one-third of the country’s GDP, so the government wanted to provide capital to support their expansion.

TH_SG-235x300

Because financing is so rare, this has prompted many Thai companies to first to set up a parent company, or holding company in Hong Kong or Singapore. Popular with foreigners, this also helps protect IP and establish common law jurisdiction for contract disputes and shareholder disputes in addition to venture capital.

Huge news as the Government of Thailand has agreed to set up a venture capital fund to help fund SME’s. As over 90% of the businesses in Thailand are small and medium sized enterprises (SME’s) – this should provide much needed capital in a country which previously had very few investment sources.

Banks traditionally do not loan out capital to any foreign owned enterprises. Also there is some collateral which is almost always provided in the form of a Chanote title. It is unheard of for financing against inventory however. If I am incorrect or you know of alternative funding sources in Thailand, please leave a comment below.

 

Here are the currently active VC firms in Thailand in the context of articles we have written:

$757M is a significant amount of capital for a country which has had stagnated GDP growth over the past few years.

It will be very interesting to see:

1. Who manages this fund?

2. How are allocations made?

3.  What are typical investment sizes or capital injections?

4. What are the terms of the investments?

5. If/when the government expects a return and at what ROI?

6. What is the horizon on this fund?

7. What legal entity is set up to manage this fund, and how do they become a shareholder in the portfolio company?

If anyone has information regarding the aforementioned VC fund – please get in touch and I will update this page.

 

Share on FacebookTweet about this on TwitterShare on Google+Share on StumbleUponPin on PinterestShare on RedditDigg thisEmail this to someone

Comments

  1. Raaj Suman says

    HI,

    I am seeking Funding for my Business in Bangkok.

    I am in the Business Plan Ready Stage.

    Kindly let me know, how I can approach the company to showcase my business and its growth potential.

    Thanking You,
    TEZAZET

    • Edmund says

      Hi Tezazet,

      The Thai SME Fund is not set up yet.

      You can approach other angels and VC’s in Thailand and the region.

      check out our other posts for more details.

  2. rashane says

    Hi,

    I’m looking for funding on alternative energy projects in Thailand. Any recommendations on which VC to approach?

    Thanks

    Rashane

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>