To ensure CVC success, treat fund managers right

SINGAPORE Press Holdings (SPH) last week announced the sale of its one-third stake in 701Search to Norwegian telco Telenor for some US$109 million. SPH said that the deal marked an attractive opportunity to realise its investment in the South-east Asian online classifieds operator, and added that it will continue to invest in the digital business.

This puts the spotlight on corporate venture capital (CVC), the investment of corporate funds directly in external startups for financial and strategic returns. The SPH Media Fund, for instance, is a S$100-million CVC fund set up in 2014 to invest in tech, media and commerce startups.

While 701Search is not a portfolio company of the SPH Media Fund - it was established in 2006, with SPH Interactive International, Norway's Schibsted Classified Media and Telenor as partners - it typifies the same idea of financing a small venture, growing it, and flipping it for a profit.