Corporates are outsourcing innovation to startups – is the approach paying off?

SINGAPORE (Nov 27): DeClout Investments, a self-styled builder of next-generation companies, has been experimenting with data analy tics with the help of two local start-ups. “We talk to them every three to four weeks. When there are business opportunities, we [may bring them along]. Our business units also meet up with them if there are opportunities to feature their products,” says Kelvin Tay, executive director for incubation at DeClout.

If the start-ups are promising, DeClout will acquire a stake in them through its venture fund, De Clout Ventures. DeClout has committed $10 mil lion to the fund, which is part of the National Research Foundation’s Early Stage Venture Fund III (ESVF) scheme. The NRF will match DeClout’s funding.

In DeClout’s business model, start-up investments are one of its primary means of generating revenue and creating shareholder value. “In the short term, there might be some near-term increase in sales,” says Tay. “In the long term, there are chances of capital gains or new revenue streams.” But DeClout is not the only local corporate working with start-ups.

---

Related Stories

• Procurri rides growth in sustainable IT consumption
• Preserving their legacy
• Remaking journalism's business model

---