NDC to co-invest with 5 more startups next year
The National Development Company (NDC), the state-owned investment arm under the Department of Trade and Industry (DTI), is targeting to partner with five more startup companies by next year, aiming to achieve 10 accredited co-investment partners (CIPs) under the Startup Venture Fund (SVF).
NDC Business Development Assistant General Manager Alewijin Aidan K. Ong said this during the announcement of NDC's first investment in SolX last Oct. 24 as the company made its promise to fund six to ten startup companies through SVF by 2024.
To fund a startup, the SVF requires NDC to acquire co-investment partners (CIPs) that match its funding.
To date, NDC has five accredited CIPs under the SVF including Gobi-Core, Foxmont Capital Partners, IdeaSpace, Investment & Capital Corporation of the Philippines (ICCP), and the Real Tech Holdings Co., Ltd.
“We’re still looking for five more to add so that, the more co-investment partners, the easier for us to reach to more investing companies,” Ong said.
Aside from investing in tech-powered projects like SolX’s, Ong said that NDC is also considering other potential sectors such as agriculture for food security, water, and waste-to-energy, among others.
“Anything that’s innovative [that doesn't exist yet in the country, that's what we're pushing],” Ong said.
Further, Ong explained that NDC may repeat co-investing with the same CIP in other company projects as long as the investment will be effective for less than a year.
Recently, NDC signed a Letter of Intent (LOI) with Australian-based company Cyclion Holdings PTY Ltd. for a potential investment in an energy security and sustainability commercial project.
Ong said that the NDC is “still looking at which funding source” this investment with Cyclion would be utilized, noting that it might be entered into a regular equity funding – which doesn’t require a CIP – if it would not qualify for SVF.
In terms of investment, Ong shared that the single investment limit in a company is 15 percent of the fund amount, supposing that with an SVF amount of P500 million, the investment in a company should not exceed P75 million.
In terms of shares, he added that NDC should maintain its investment by 40 percent or below – not exceeding the majority – because the company will be considered a government-owned or controlled corporation (GOCC).
“The less we can give to a company, the better – [we can have more investments],” Ong expressed.
Ong said that NDC is also looking forward to adding P250 to P500 million to the current SVF by next year.
Currently, the NDC still has a P489 million budget remaining under the SVF, from its first investment of P11 million in the SolX company alongside with Real Tech.
The SVF comes from the NDC’s own internally allocated funds with no disbursement limit, according to Ong.