CREDIT Saison on Thursday announced the launch of a US$55 million venture fund focused on early-stage startups, the Japan-based credit card company's first dedicated corporate venture capital (CVC) fund focused on South-east Asia and Indian markets.
The CVC, Saison Capital, intends to deploy its funds through equity investments with initial ticket sizes of up to US$1 million and aims to invest in six to eight companies every year. The fund is also primarily looking towards fintech startups that can reach out to the underbanked regions, as well as those that can complement Credit Saison's suite of financial services.
"We see a trend of startups looking to integrate financial services in their product, but many of them might not have the expertise to do so," said Kosuke Mori, managing partner at Saison Capital, adding that the CVC can then come in with the technical expertise and financial capabilities to help these startups scale up.
However, he was quick to add that although the CVC is better positioned to help early-stage startups in the financial space, it is still both geographically and sector agnostic.
When asked about its reason for focusing on early-stage startups, Mr Mori said: "We are able to move fast, which can help Saison Capital to better cater to the needs of agile, early-stage startups."
"Saison Capital also has an independent decision-making process from Credit Saison," said Chris Sirisereepaph, a partner at the fund.
Mr Mori said that the CVC is willing to exercise patience towards its portfolio companies, and ultimately hopes to play a long-term game in growing the financial services sector, especially among the underbanked in the region.
The CVC's patience towards its portfolio companies might pay off in the long run. Often, early-stage startups have a long runway before they can become profitable, and in certain developing regions in South-east Asia and India, this could play out for several years at least.
Mr Mori said that some factors the fund looks at when considering an investment include the startup's unit economics, its scalability, and its founder's ambition in growing the company.
Besides that, he said the CVC also looks at how they can provide expertise outside capital funding.
For example, Saison Capital's initial investment in one of Indonesia's largest peer-to-peer lending platform Koinworks can see benefits from Credit Saison's lending capabilities, as well as tap its expertise in other verticals such as payments, consumer credit and asset management.
"Our unique value proposition is our strong institutional knowledge of the financing space, the investment team's tech backgrounds and the speed of our conviction," said Mr Sirisereepaph.
Saison Capital's portfolio companies will become part of the Credit Saison ecosystem, and will have access to partners across its finance and technology arms. The Credit Saison ecosystem includes joint ventures with HCM Development Bank in Vietnam and technology companies such as Grab.