By
Thuy Tuong
Tue, May 9, 2023 | 3:09 pm GMT+7
In an exciting development for the Asian financial landscape, Japanese megabank SMBC has co-founded the SMBC Asia Rising Fund, a corporate venture capital fund aimed at enhancing the bank’s investment initiatives across Asia. This collaborative effort with Tokyo-based venture capital firm Incubate Fund (IF) is established in Singapore, strategically positioning SMBC to expand its influence in burgeoning markets like Vietnam.
The newly launched fund, simply referred to as CVC, is designed to accelerate business development and forge partnerships by investing in promising Asian startups. According to SMBC’s announcement on May 9, this fund will operate over a decade, channeling investments into companies that align with SMBC Group’s growth objectives.
A significant aspect of this fund’s strategy includes targeting financial institutions across Asia where SMBC holds equity stakes. This encompasses collaborations in diverse sectors such as lending technology, payment systems, supply chain finance, Banking-as-a-Service, and digital assets, among others.
Recently, on March 27, SMBC solidified its commitment to the Vietnamese market by acquiring a 15% stake in VPBank for approximately $1.5 billion through a private placement. This acquisition underscores SMBC’s strategy to become a strategic investor in Hanoi’s vibrant banking scene. Furthermore, in October 2021, SMBC completed the acquisition of a 49% stake in VPBank’s consumer credit subsidiary, FE Credit, for about $1.37 billion, showcasing a robust commitment to the region.
VPBank chairman Ngo Chi Dung (right) and SMBC managing director Masahiro Yoshimura celebrate their investment deal in Hanoi on March 27, 2023. Photo courtesy of VPBank.
With a keen focus on Asia’s remarkable medium- to long-term growth potential, SMBC’s multi-franchise strategy aims to strengthen its foothold through targeted investments and acquisitions. This approach not only enhances their regional operations but also sets a foundation for building a robust second and third SMBC Group in emerging Asian markets. The strategic objective is to offer comprehensive banking services, including retail, and to impart SMBC’s expertise while nurturing local talent.
The CVC, established in Singapore, is expected to capitalize on SMBC’s extensive global network as a significant financial institution. By teaming up with Incubate Fund, which possesses vast expertise in startup investments across Asia, the fund aims to drive innovation and growth in key markets. IF, renowned for its specialization in early-stage startups, has successfully invested over JPY98.3 billion ($727.84 million) in more than 450 startups since its inception in 2010. Their established network allows for effective management and execution of investments not just within Japan, but also in vibrant markets like Vietnam.
As venture capital flourishes, with significant opportunities for growth, this initiative reflects both SMBC’s commitment to expanding its footprint and Vietnam’s promising landscape for innovation and entrepreneurship. The collaboration between SMBC and IF is poised to create synergies that could elevate the startup ecosystem across Asia.