$5m in BEDB fund for high-tech Brunei-based firms up for grabs
Tuesday, May 12, 2009
THE Brunei Economic Development Board (BEDB) is playing the venture capitalist (VC) role as it seeks to sink $5 million into Brunei-based high-tech companies that show potential to make it in markets outside the Sultanate.
It signed yesterday a VC fund agreement with Singapore-based Accel-X Pte Ltd, a $15-$20 million company that runs a so-called business angels scheme, which allows young firms access to funds to finance their expansion.
Under the agreement, BEDB's contribution of $5 million will be reserved only for Brunei-based high-tech companies in the areas of ICT, interactive digital media and engineering.
"There are venture capital funds that focus on the mature and later stages of a company's development, and this is where we try to fill the gap, for early stage companies who have the potential to scale beyond Brunei, but need the extra funding," said Vincent Cheong, BEDB chief executive officer.
"The fund as a whole has three partners, where all three will invest their portions, but the monies that is invested by the BEDB is actually ring-fenced. Accel-X is the manager of the fund and they will use our $5 million towards investments in Brunei-based companies. If the other fund or the other partners are agreeable, where they also want to invest their money into the Brunei-based companies, they are free to do so," he said.
Edmund Yong, Accel-X managing partner, said there is no niche to which the BEDB or Accel-X are narrowing down their investments and companies from telecommunications to Web 2.0 companies can submit a proposal.
Asked about the eligibility criteria for this fund, he said it is open to "every potential start-up company in Brunei".
"When we invest in companies, we think that the companies can scale beyond Brunei," he said.
"We are looking at investments of three to five years, so it would be a kind of marriage where we have to get along very well and work together, so the involvement can be operational or overview depending on the need of the company," said Yong.
Cheong said the amount invested into a company would depend on its initiatives or what it intends to do.
He said that the BEDB has seen enough potential from the existing group of so-called business incubatees at the iCentre, which has fueled their confidence in providing this fund.
"We are not specific in terms of the type of (ICT) company that we are investing in, as long as it is high-growth and high-tech. It has to be scaleable and the fund has to make a return for itself. It is not a matter of throwing the money at the company and that's it, so we're looking for a company that has the potential to scale up to grow beyond the shores of Brunei," he said.
The BEDB is in discussion with the relevant ministries to finalise the operational aspects of the fund disbursement.
"The BEDB doesn't own the budget, so there is a certain disbursement process that we have to settle with the relevant ministries so that the funds can be channelled through," said Cheong.
"Hopefully we will have invested in one company by the end of this year, but it doesn't depend so much on the operational detail of the fund, more so on the ideas (from the local ICT companies) and whether the investment managers agree or not, but I certainly hope that it will happen by the end of the year," he added.
The Brunei Times
It signed yesterday a VC fund agreement with Singapore-based Accel-X Pte Ltd, a $15-$20 million company that runs a so-called business angels scheme, which allows young firms access to funds to finance their expansion.
Under the agreement, BEDB's contribution of $5 million will be reserved only for Brunei-based high-tech companies in the areas of ICT, interactive digital media and engineering.
"There are venture capital funds that focus on the mature and later stages of a company's development, and this is where we try to fill the gap, for early stage companies who have the potential to scale beyond Brunei, but need the extra funding," said Vincent Cheong, BEDB chief executive officer.
"The fund as a whole has three partners, where all three will invest their portions, but the monies that is invested by the BEDB is actually ring-fenced. Accel-X is the manager of the fund and they will use our $5 million towards investments in Brunei-based companies. If the other fund or the other partners are agreeable, where they also want to invest their money into the Brunei-based companies, they are free to do so," he said.
Edmund Yong, Accel-X managing partner, said there is no niche to which the BEDB or Accel-X are narrowing down their investments and companies from telecommunications to Web 2.0 companies can submit a proposal.
Asked about the eligibility criteria for this fund, he said it is open to "every potential start-up company in Brunei".
"When we invest in companies, we think that the companies can scale beyond Brunei," he said.
"We are looking at investments of three to five years, so it would be a kind of marriage where we have to get along very well and work together, so the involvement can be operational or overview depending on the need of the company," said Yong.
Cheong said the amount invested into a company would depend on its initiatives or what it intends to do.
He said that the BEDB has seen enough potential from the existing group of so-called business incubatees at the iCentre, which has fueled their confidence in providing this fund.
"We are not specific in terms of the type of (ICT) company that we are investing in, as long as it is high-growth and high-tech. It has to be scaleable and the fund has to make a return for itself. It is not a matter of throwing the money at the company and that's it, so we're looking for a company that has the potential to scale up to grow beyond the shores of Brunei," he said.
The BEDB is in discussion with the relevant ministries to finalise the operational aspects of the fund disbursement.
"The BEDB doesn't own the budget, so there is a certain disbursement process that we have to settle with the relevant ministries so that the funds can be channelled through," said Cheong.
"Hopefully we will have invested in one company by the end of this year, but it doesn't depend so much on the operational detail of the fund, more so on the ideas (from the local ICT companies) and whether the investment managers agree or not, but I certainly hope that it will happen by the end of the year," he added.
The Brunei Times
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