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Fund to fuel digital startups

A panel of speakers at the Smart Digital Innovation Fund press conference yesterday in Phnom Penh.
A panel of speakers at the Smart Digital Innovation Fund press conference yesterday in Phnom Penh. Heng Chivoan

Fund to fuel digital startups

Cambodian mobile operator Smart Axiata launched a $5 million venture capital fund yesterday that will seek to identify, fund and nurture local digital services companies and startups.

The Smart Axiata Digital Innovation Fund will seek “to invest in ideas and businesses in the digital ecosystem to spark the development of a robust digital economy that will help grow Cambodia as a whole”.

“A new chapter in Cambodia’s digital journey is about to start as we anticipate that the fund will kickstart the next wave of digital growth,” said Thomas Hundt, CEO of Smart Axiata.

According to Hundt, the fund will target technology startups and companies in the fields of digital financial services, or fintech, e-commerce, online entertainment, social media platforms, advertising, education and health care solutions.

“These disruptive models will not only complement our first-class networks, but will make Cambodian lives easier and more connected,” he said.

Smart, a subsidiary of Malaysian telecommunications giant Axiata Group, will provide the principle investment for the fund, while local investment firm Mekong Strategic Partners (MSP) will manage how the capital is allocated. The fund’s investment committee is governed by representatives of Smart, MSP and an unnamed third party.

Kem Bora, investment manager for MSP, said the fund has a lifespan of three to five years and aims to invest in five startups annually.Individual investments from the fund will vary from $25,000 to $500,000 according to the developmental stage of a business, the particular industry and vetted funding requirements.

In addition to direct financing, the fund will provide incubator support by monitoring investment progress and providing knowledge sharing for business development.

Potential recipients of the fund will also gain insight into marketing, branding and other critical business processes that leverage Smart’s network “to create and realise value that has so far remained untapped”, according to a press release.

Stephen Higgins, managing partner at MSP, said the fund is seeking to invest in early-stage and growth-stage companies.

“We are also looking for high-performing tech firms with big aspirations that have successfully launched their tech products or services and are looking to scale up,” he said.

Thul Sela, a young local entrepreneur who attended yesterday’s event, said he intended to apply for funding for his conceptual business model.

His startup would sell new computers with his own preinstalled Khmer language software that would promote digital literacy in rural areas where access to computers remains limited. According to Sela’s cost scenario, the computers could be sold for as little as $300 per unit.

“In the past, when we have a new business idea, we do not have enough money to start a venture, so initiatives die,” he said.

“Now, if we qualify, we might find the capital support to survive.”

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