EDB New Ventures launches S$10m pilot programme to drive corporate innovation

EDB New Ventures, the corporate venture building arm of the Singapore Economic Development Board (EDB), has launched a S$10 million pilot programme to co-invest with large companies in the city-state in hopes of spurring new growth areas for these businesses.

The move comes in part of Singapore’s efforts to "help firms innovate and collaborate on a global scale” and remain competitive, said Deputy Prime Minister Heng Swee Keat in his Budget speech this year. Over the past three years, over 40 corporate ventures have been successfully incubated in the city-state.

This pilot programme, the Corporate Venture Launchpad (CV Launchpad), will run for one year. It can help up to 20 multinational corporations (MNCs) as well as large local enterprises (LLEs) based in Singapore build new ventures that are beyond their existing core businesses. . 

“Singapore has a high concentration of multinationals, as well as large local enterprises,” said Choo Heng Tong, executive vice-president for New Ventures and Innovation of EDB at the launch of the CV Launchpad on Thursday. “We want to support these large businesses, which have significant market reach and scale, in leveraging these advantages to create new businesses that add value.”

The programme will see these large companies work alongside the four appointed venture studios -  BCG Digital Ventures, FutureLabs Ventures, Leap by McKinsey and Rainmaking - to validate their new venture ideas and business plans. 

Panellists speaking at the launch agreed that there is a confluence of factors which are supporting corporate venture building right now. 

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“The market expects corporates to be building new business. It's imperative and it's what shareholders want to see,” said Samuel Hall, partner and chief executive at Rainmaking Venture Studio. “In light of what we've seen with the pandemic, the window of opportunity for companies to reinvent themselves has massively diminished.”

There becomes “a need to not just to safeguard existing businesses and mitigate risk against existing businesses, but also to capture new areas of opportunity,” added Mr Hall. “Corporate venture building can help businesses unlock completely new business models, new value pools as well as new customer segments.”

The CV Launchpad allows us to bring a proven model at scale to more corporates in Singapore over the coming year, he said.

Through this launchpad, EDB New Ventures will support up to 50 per cent of the cost for an early phase of the venture building process. The phase, called a concept validation sprint, aims to apply “venture building methodologies to develop ideas into investable businesses”. Here, a small team will collect customer insights, test the desirability of business concepts and determine viability of a business. This can last anywhere from three to six months. 

Peter Cho, managing director and partner, as well as the Singapore centre lead for BCG Digital Ventures, said that venture studios are akin to close partners that support corporations along in their venture building process. 

Like sherpas that help climbers ascend Mount Everest, venture studios will “walk alongside you, to go over the Khumbu Icefall and up the Hillary Step.

“Maybe we have a bit more experience but we don't know everything. Things like entrepreneurial approaches, talent and mindset can be coached, but at the end of the day, (corporates and venture studios) have to get there together,” he said.

Many of these digital ventures have the "potential to become multimillion-dollar or billion-dollar businesses, and generate the next level of revenue growth in corporates," added Mario Aquino, managing partner at FutureLabs Ventures.

For high potential ventures launched from this programme, EDB New Ventures may provide further risk sharing capital and value creation support beyond the sprints to see through their early stages of growth, it said.

As companies pursue opportunities in sectors that are new for them, the creation of these ventures have the potential to become a growth driver for the Singapore economy, said Beh Swan Gin, chairman of EDB.

Singapore-based MNCs and LLEs in industries overseen by EDB are eligible for this programme. Companies also should not have been a prior recipient of grant support for corporate venturing-related activities.

Corporates will be required to dedicate full-time staff to be part of the sprint team, provide adequate C-level attention towards supporting the sprint team and commitment for resourcing the setup of the venture upon successful concept validation. Any venture launched from the corporate venture launchpad must be headquartered in Singapore.

These new ventures must address a large opportunity space, with the aim of creating new revenues outside of the corporation's existing core business, said EDB. “It needs to have strong potential to leverage the corporation's assets and resources.”

The value that comes from working with a venture studio is benefiting from the experience and lessons that have been learnt, said Badrinath Ramanathan, managing partner at McKinsey Singapore. “For example, we've successfully scaled more than 300 ventures globally. Corporates can benefit from all that experience and improve their odds of success. 

“Corporate venture building is something which corporates can learn. Partnering with venture studios is like a catalyst to get you started on the journey, so that you can build that muscle on your own afterwards and go on to launch many ventures.”

Companies can visit EDB’s website here for more details.