New Singapore initiative designed to help corporates grow

Boston Consulting Group and McKinsey & Company are among four firms chosen as part of a brand-new business growth initiative launched by the venture building arm of the Singapore Economic Development Board (EDB Ventures).

Titled the Corporate Venture Launchpad, this new S$10 million initiative brings together the venture and incubation wings of McKinsey (Leap by McKinsey) and Boston Consulting Group (BCG Digital Ventures), along with two other venture studios – FutureLabs Ventures and Rainmaking – to help pilot a programme to help large Singapore companies innovate their products, services and business models to keep ahead of the competition.

According to EDB’s chairman Beh Swan Gin, this new programme “seeks to spur companies to create new ventures from Singapore, that can scale to become globally competitive businesses”.

Venture building a focus in Asia

This launch comes off the back of research by the EDB last year when 11 out of 13 CEOs of Singapore-listed companies said venture building was a top priority. However, venture building can often be a challenge for big firms who are focused heavily on day-to-day operations.

“While companies have the innovation capacity, much of their focus is often on optimising core business operations,” explains Choo Heng Tong, EVP, New Ventures and Innovation at EDB. “Building ventures with an agile and autonomous entrepreneurial team will allow them to effectively search and build new growth areas. We want to support these large businesses, which have significant market reach and scale, in leveraging these advantages.”

The investment of corporate funds in external startup companies (Corporate Venture Capital – CVC) is strong in Asia, with the continent continuing its global CVC investment reign in 2020 with a total of 1,360 deals (compared to 1,275 in North America), marking a 33% annual increase. 

How will the Corporate Venture Launchpad work?

Set to run as a one-year pilot programme, the Corporate Venture Launchpad is aimed at supporting up to 20 large and well-established Singapore-based companies to explore new areas of growth beyond their existing core business.

Under the programme, eligible companies will work closely with the four venture studios to incubate new businesses in an agile and phased approach, everything from idea generation through to concept validation and venture launch.

Some US$7.4m of available funding will fund 20 concept validation sprints, with EDB New Ventures supporting up to 50% of the cost of each concept validation sprint over a six-month period, though potential follow-on co-investment and value creation support will also be available.

Who is the Corporate Venture Launchpad for?

This programme aims to support large, established corporates that are new to the corporate venturing journey in Singapore to:

• Build their new ventures quickly and effectively
• Create new growth and keep ahead of disruption through building new ventures with innovative products, services and business models
• Join a growing corporate venturing movement, where corporates build new ventures that have strong potential to scale from Singapore to become globally competitive businesses

What are McKinsey and BCG offering in this programme?

With Leap by McKinsey having helped develop 380 new businesses over the past 5 years, and claiming a 5.1x average return on investment, the consulting firm is well-placed to help with such an initiative and has assembled an 8-strong team to design and deliver a six-week Venture Program.

“We are incredibly excited,” says McKinsey’s Singapore managing partner Badrinath Ramanathan. “We believe the next wave in creating value will come from innovation by incumbent companies, even more so than start-ups. This is a wonderful opportunity to create Singapore’s next generation of business leaders.”

First announced end of 2019, BCG’s Digital Ventures arm (BCGDV), including a new campus in Singapore, launched five new ventures in the city-state last year and is “looking forward to boosting Singapore’s corporate venturing ecosystem jointly”, says BCGDV MD Hanno Stegmann.