Corporate ventures capital (corporate ventures capital) is considered a form applied by companies when cooperating with startups to create breakthroughs.
The handshake between startup community with large corporations is no longer a strange thing in the world. On the startup side, they benefit from the support of corporations such as capital, management experience … In the opposite direction, corporations will receive potential business models, expanding their capabilities. accessibility and customer response through new technology platforms and growing startups.
In Vietnam, a number of large domestic corporations such as VinGroup, Viettel, CMC, FPT … have also established investment funds for tech startups.
Thai Van Linh, CEO of Vingroup Ventures, said the Fund’s size is about US $ 100 million with average investments of US $ 5-10 million. In addition to funding, VinGroup Ventures also helps startups get to the top by opening Vingroup’s ecosystem to businesses, helping them test their products.
In addition to Vingroup Ventures, the Group also has VinTech Fund (VinTech Application Research Fund) and VinGroup Innovation Foundation (VinGroup Innovation Fund – VINIF).
With VinTech Fund, projects are selected with the expectation that they will create technology with research content, creativity and commercialization. The level of funding for each research project, if approved, will be granted up to 10 billion VND.
As for VINIF, this fund was established with the function of assisting organizations and individuals to conduct scientific research, technology and innovation in order to create sustainable and positive changes for Vietnam. The funded projects will involve fields such as computer science, AI, robotics, etc.
For Viettel, in the video shown on the occasion of the Group’s 30th anniversary, the Viettel people mentioned a challenge. That is the scale of Viettel is too large while the market is moving rapidly. Therefore, there is no other way that Viettel has to cooperate with smaller companies, create faster. The promotion of this cooperation will help the Group be active and adapt faster to the trend.
In 2016, when answering the Dealstreet Asia newspaper, Mr. Le Dang Dung, who was then Deputy General Director of Viettel, talked about this and revealed the establishment of a venture capital fund specializing in pouring capital for foreign startups. According to him, investing in startups is an inevitable fact as a business grows and needs to diversify to find new growth momentum.
“Investing in startups is an inevitable fact as a business grows and needs to diversify to find new growth momentum.”
The foundation of the collaboration comes from startups using their network infrastructure to develop products. In addition, Viettel can also buy some startups if the founders agree.
In 2017, the Group supported tech startups through the Vietnam IoT Hackathon contest with prizes of nearly VND 600 million.
Recently, the Group announced the launch of a groundbreaking innovative solution contest with Viettel 2019 (Viettel Advanced Solution Track 2019) season. Similar to the idea of setting up a venture capital fund to respond to Dealstreet Asia, Viettel’s playground has no borders when expanding the audience both at home and abroad in order to find breakthrough ideas and solutions. with the power of telecommunications to create products and services of international stature.
CMC Corporation has also established CMC Innovation Fund (CMC Innovation Fund – CIF) with the purpose of seeking and developing ideas, products, solutions and services on technology platforms. With the size of VND 50 billion, CMC will deduct at least 10% of profit from the Group’s production and business activities every year. CIF is operated as a venture capital model.
The projects are targeted in the fields of information technology, telecommunications, new technologies such as internet of things, big data, AI …
The form of corporate ventures capital (CVC) is currently the most applied company in the form of partnering with startups to create breakthroughs.
The biggest difference between corporate venture capital funds and conventional venture capital funds is that of strategic investments, the cooperation between startups and large companies must be based on a mutual spirit. create value for each other and resonance.
According to a Unilever Foundry survey, 79% of businesses and 78% of startups say they want to work together more in the future.
Many studies show that the company’s creative research activities if ordered outside in the form of partnering with start-ups will have more advantages in streamlining operations. As for startups, working with businesses will help them shorten the time to prove the product is suitable for the market. These large companies can also become potential customers for products made by startups.
Unilever Foundry predicts that by 2020, the relationship with startup will become an indispensable part for corporations. According to a survey of this unit, 79% of businesses and 78% of startups said they wanted to work together more in the future.
* Source: Economic life