BUSINESS OPPORTUNITY THROUGH CORPORATE VENTURE CAPITAL

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“Theysuck!Theyarenotinterestedinthecompany’ssuccessortheentrepreneur’ssuccess.Corporationsexisttomaximizetheirinterests.Theycanneverbemenchy ormagnanimous.It’snotintheirDNA,andsotheysuckasinvestors.”

- FredWilsonofUnionSquareVentures,oncorporateventurecapital

CVC: VC’S MISUNDERSTOOD, LESS SEXY COUSIN?

GLOBAL VC INVESTMENT ACTIVITYGLOBAL VC INVESTMENT ACTIVITY ON THE RISE WITH 2015 BEING A RECORD YEAR

$45

$64 $59 $65

$108

$141 $127

8,459

10,842

13,006

15,800

18,157 17,992

…

2010 2011 2012 2013 2014 2015 2016

GLOBAL VC FINANCING

Invested ($Bn) Deal count (#)

Source: KPMG

13,655

$5.3M $5.9M $4.5M $4.1M $5.9M $7.8M $9.3M AVR. $/ROUND

57%

12%

31%

GLOBAL VC INVESTMENT ACTIVITY GLOBAL VC ACTIVITY HAS NEARLY DOUBLED FROM 2013 TO 2016

$127.4BN INVESTED

13,665DEALS

2016

AMERICAS§ $72BN INVESTED

§ 8642 DEALS

EUROPE§ $16BN INVESTED

§ 3142 DEALS

ASIA§ $39BN INVESTED

§ 1742 DEALS

Source: KPMG

CORPORATE VENTURING BY THE NUMBERSCORPORATE INVESTMENT ACTIVITY HAS RISEN SHARPLY OVER THE PAST 5 YEARS

Source: Forbes, KPMG, CB Insights

NUMBER OF GLOBAL ACTIVE CORPORATE INVESTORS IN 2016

965 3x 75%INCREASE IN GLOBAL ACTIVE CORPORATE

INVESTORS

PERCENTAGE OF FORTUNE 100 ENGAGED IN

CORPORATE INVESTING

NUMBER OF PATENTS PER DOLLAR INVESTED

VS. IN-HOUSE R&D

3x 32%PERCENTAGE OF CVC

FUNDING TO ALL STARTUP FUNDRAISINGS

CORPORATE VENTURE INVESTMENT VOLUME

Source: CB Insights

CORPORATES PLAYING AN INCREASINGLY PROMINENT ROLE IN VENTURE FUNDING

9.7 16.9 29.112.7

31.954.1

71.3

26.4

23% 24%29%

32%

2013 2014 2015 1H2016

CVC FUNDING CONTRIBUTION ($BN)

Other Funding ($Bn)

CVC Funding ($Bn)

CVC Funding to Total Funding (%)

960 1260 1365 633

49025475 5753

2480

16%19% 19% 20%

2013 2014 2015 1H2016

CVC PARTICIPATED DEALS (#)

No CVC Deals (#)

CVC Partipated Deals (#)

CVC Deals to Total Deals (%)

WHO ARE THESE CORPORATE VENTURERS?A WIDE ARRAY OF INSTUTIONS SPANNING TECH, HEALTH CARE, FINANCE, AUTO, FMCG, ENERGY & MEDIA HAVE JOINED THE VC SPHERE TO FOSTER INNOVATION

THAI CVC AS A DRIVER OF INNOVATIONIN 2016 & 2017, THAILAND’S STARTUP ECOSYSTEM HAS SEEN AN INFLUX OF CVC ACTIVITY, WITH LOCAL BANKS LEADING THE WAY WITH OVER US$150 MILLION IN NEW INVESTMENT FUNDS

Wave2:FinancialWave1:Telcom Wave3:Industry

STRATEGIC REASONS FOR CVCTHERE ARE A VARIETY OF STRATEGIC REASONS FOR COMPANIES TO ENGAGE IN CORPORATE VENTURING, AND MANY WAYS TO MEASURE STRATEGIC RETURNS FROM SUCH ACTIVITY

SOURCENEWPRODUCTS&SERVICES

OUTSOURCER&D

NURTUREECOSYSTEM&STIMULATEINNOVATION

SOURCEACQUISITIONTARGETS

KNOWLEDGEACQUISITION&TRANSFER

RECRUIT,DEVELOP&MOTIVATETALENT

COMPARISON: FINANCIAL VS. CORPORATE VC

FUND OBJECTIVE

CONTROL PREFERENCE

VALUE CREATION

Financial return

FINANCIAL VC CORPORATE VC

Financial and/or Strategic return

Board seat (active role) Board observer role (passive role)

Financial return• Successful exit of portfolio

company (IPO, trade sale)Strategic return• Learning (Tech know-how) • Product implementation usage• Company acquisition

Financial return• Successful exit of portfolio

company (IPO, trade sale)

SOURCE OF FUNDS External (Limited partners) Internal (Company-sponsored)

FUND HORIZON Limited life (typically 10 years) Typically no end of fund life

FOLLOW ON Based on investment prospects Based on corp. objectives & appetite

CORPORATE VENTURING CHALLENGES

• DECISION MAKING PROCESS & SPEED

• TIME & COST OF IMPLEMENTATION• COMMITMENT & LONGEVITY

• ALIGNMENT B/W CORPORATE & STARTUP

• EXCLUSIVITY• COMMAND & CONTROL

• FINANCIAL VS. STRATEGIC RETURNS• VALUE ADD & EXTRACTION• TYPE & TIMING OF EXIT

• ALIGNMENT B/W CORPORATE & VCs

• COMPENSATION & CARRY• RECRUITMENT &

RETENTIONTALENT RETURNS

ORGANIZATIONCULTURE

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