Ooctane, a Cambodian venture capital firm backed by local logistics company Worldbridge Group, has identified potential start-ups in the Kingdom to fund, saying it has reserved $55 million for Cambodia’s growing number of entrepreneurs.
The firm was first launched in June last year with Worldbridge Group’s founding chairman Sear Rithy investing $5 million of his own money in the fund.
Rithy has so far raised an additional $50 million from his network of friends, giving the venture capital firm a total of $55 million at its disposal.
One of the firm’s general partners, Tapas Kuila, said since launching the fund last year, the firm has spent time building its internal team and system, meaning it is only now beginning to invest.
Now, he said, everything is ready and the firm wants to let the start-up community know it is open for business.
“Our shop is open now and if there are any start-ups out there or new businesses that want to grow and expand, please talk to us, please reach out to us.
“We have earmarked a few start-ups over the past few months and now as a team, we are actually trying to do a lot more research into them."
“Hopefully we’ll be able to close [the deals] quite soon, maybe sometime in the middle of this year,” he said.
The market for private equity funds has been increasing noticeably in the Kingdom over the past few years, as more firms reserve larger sums to support the growth of small- and medium- enterprises (SMEs).
While there are many equity firms in the market, the five largest – Emerging Markets Investment Advisers, Belt Road Capital Management (Cambodia) Co Ltd, Smart Axiata Co Ltd, Leopard Capital LP and International Finance Corporation, the World Bank’s lending arm – have earmarked hundreds of millions of dollars for SMEs.
Cambodia Securities Exchange (CSX) Market Operations Department director Kim Sophanita said the availability of more private equity funds is very important, saying it would help Cambodian start-ups grow faster and make it easier for them to list on the exchange in future.
She said start-ups currently cannot meet CSX listing criteria in terms of accounting standards, corporate governance and so on. But when venture capital firms join, they have both the money and the skills.
Such firms do not merely provide funds but may also help start-ups reform and provide them with strategies to grow as businesses, she added.
Sophanita continued that venture capital firms and CSX are not competitors, but provide distinct financial products to businesses. Each product has different characteristics and businesses can choose which one best fits their strategies.
“Once [start-ups] grow big enough, venture capital firms will use the stock market as their exit strategy. Listing them in the stock market can provide a higher value for the companies and [venture capital firms] can, therefore, sell their shares, making a lot of profit,” she said.
“With more venture capital firms, there will be more eligible companies to get listed in CSX.”