LOXLEY yesterday announced the formation of K2 Venture Capital Company, which will invest in high-potential start-ups with a view to achieving the company’s long-term goal of high returns. K2 Venture Capital is a joint venture between Loxley’s Loxbit unit and TIH, a Singaporean private equity fund.
Loxbit and TIH will initially co-invest Bt150 million into the fund, which will be open to outside investors with the target of ultimately raising Bt700 million in capital within the next 12 months.
Vasant Chatikavanij, vice chairman of the executive board of Loxley, said that in its first year the K2 fund aimed to invest in five or six promising start-ups as well as early-stage companies “with the potential to be transformative on a societal or national level”.
Importantly, they should already have a product either in development or commercialised, he said, adding that this is where K2 can help “through leveraging partners’ capabilities to help these companies grow exponentially”.
“Loxley has deep in-house IT and software capabilities, as well as an extensive network of partners in various business sectors, which can be leveraged to help these start-ups that K2 invests in to realise their ideas and products to achieve success quickly,” Vasant explained.
Stanley Wang, director of K2 Venture Capital, said TIH had an extensive investment and partner network throughout Southeast Asia.
TIH’s approach is to work closely with the management of investee companies to create value through strategic and operational inputs, and its goal is to achieve long-term growth and provide a steady stream of dividends to shareholders through income generated from its portfolio, he said.
Therefore, through these networks, K2 will first focus its investments in Thailand with a view to expanding to other countries in Southeast Asia, he added.
The current areas of interest for the K2 fund are financial technology (fintech), insurance, big data analytics, machine learning, the Internet of Things, blockchain applications, precision agriculture, vehicle telematics and electronic trading platforms, the director said. K2 Venture Capital recently made its first investment, into the fintech start-up MoneyTable, which provides a closed-end peer-to-peer lending platform.
“The financing environment for technology ventures is still in its early stages, and investors will generally have to wait three to five years before monetising returns. This is only suitable for those who are in it for the medium or long term – it’s not a get-rich-quick game.
“The Thai government’s Digital 4.0 economy initiative, together with updating the legal and financial framework for e-commerce and creating incentives for venture-capital firms to invest in tech start-ups, will all help contribute towards stimulating a viable and vibrant venture-tech ecosystem,” Wang said.