Managing Partner at 500 TukTuks
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The discussion surrounding the COVID-19 pandemic has seemingly gone on forever, and there does not seem to be any sign of stopping in the near future 2022. In this context, there are winners and losers in the startup space, where industrial focussed startups lose out to sectors such as E-commerce, Logistics, and Business Solutions which offer in-demand transformation services. This sets the backdrop of our outlook here in Thailand.
Background + Challenge: In the eyes of many, the Thai start-up scene can be seen as a late bloomer, with a stronger influx seen from 2016 onwards. Similar challenges faced by start-up communities all around Southeast Asia plagued the progress of Thailand as well, limiting initial progress (e.g., the ability to attract and retain high-skill tech talents, capital raising, and general manpower readiness).
Strong Growth: Challenges aside, significant leaps in the start-up community have been made as of late even amidst the pandemic, as businesses pivot and leverage upon the situation. An almost 10 times increase in the sheer numbers of startups from 102 in 2018 to over 1000 in 2022 is indicative of such prominent growth. As a market, Thailand is unique. Developments in multiple industries are considered relatively nascent, as a good number of startups prefer to replicate popular business models from the west. This accompanied by a tech-savvy population indicates strong growth opportunities, especially in the FinTech scene, which takes up a whopping 60% of total capital funding in Thailand from 2020 onwards. This focus on FinTech was expedited where the necessity for digital services was highlighted with the increased remote activities as COVID-19 forced a new normal.
Governmental Policy to Support: Another recent trend in encouraging overall ecosystem growth is the increased acceptance of foreign start-ups and founders into the Thai setup. With the rollout of the SMART Visa, this special work permit intends to attract a highly skilled workforce and foreign investors to be a part of the Thai start-up ecosystem, with a keen focus on 13 industries with strong growth potential. This embracement of foreign talent is in line to mitigate the issue of brain drain, especially in the tech sector which has limited the progress of the startup scene in Thailand for the past few years.
Future outlook: Moving forward, despite the challenges that appear as obstacles for Thai startups, the future looks bright. With the rise of Thailand’s very own born and bred unicorn (a startup with at least a US$1 billion valuation) in Flash Express, this noteworthy success story encapsulates the strong possibility of increased vibrancy, where Flash sets the path as a trailblazer for those who follow.
Unicorn trends: Today, the meteoric rise of Flash Express as Thailand’s first unicorn succeeds past success stories such as Agoda, a hotel and flight booking site previously acquired by the Priceline Group, and Ookbee, an e-book e-commerce site. Aside from the more mainstream industry of Logistics and E-commerce, the Crypto-Defi technology is gaining significant traction as well, with Bitkub at the center of it all.
Call for action to address inexperienced founder problem: As expected, innovation and creativity are key to vibrant startup culture, with the need for support of a relatively young mix of founders here in Thailand. Generally, with an average founder age of 32 years old (focus group interview of 100 representative startups), these founders have less experience in key areas which are believed to be crucial for startup success. Naturally, this means that support in such areas of weakness in is needed in the ecosystem. 1. HR and organizational skills 2. Financial planning 3. Business expansion plans domestically and internationally are flagged out as such spheres of importance. For sustainable startup growth spearheaded by the emergence of Thailand’s first unicorn, these areas must continue to be the focus for the stakeholders such as the Thai Government, CVCs, and even the Education system responsible for the talent pool.
Call for action to address trend-following mindset: Aside from the technical skills required of a successful startup founder, an innate drive for creativity is of great importance as well. It is not easy to create a carbon copy of specific business models that have seen success elsewhere around the world, thereafter, adapting this model to fit the local context. However, this trend appears to be quite widespread in Thailand, which limits general creativity around the conceptualization of new models. On this note, this calls for all stakeholders who accompany startup founders such as universities to emphasize the need to think out of the box and not blindly follow. Therefore, it is heartening to see the launch of multiple new initiatives to boost such creative thinking, where one trademark example is the Thailand Startup League. Since its inception in 2017, the Thailand startup league has had over 70,000 students participate, nurturing 40 companies to full-scale launch with an overall market value of over 400 million Baht (13 Million USD) to date. Such initiatives are crucial to nurturing the innovative startup mindset in youth, as they represent the foundation of the future ecosystem.
Governmental support: The Thai Government has also played its part in supporting the growth of startups in specific key industries. Consistent partnerships between NIA (National Innovation Agency) and foreign firms with niche expertise are happening day on day. Just recently, Aqua-spark linked up with NIA to form a joint partnership to focus on Agri-tech in hopes to fulfill the vision to become the “Food Tech Silicon Valley”. This is a significant move as it represents the allure Bangkok offers ahead of other Southeast Asian giants in this FoodTech field. At the same time, Depa Digital Startup Fund, an initiative under the Ministry of Digital Economy and Society is expediting the progress for digital-based startups, where grants up to 1M THB are granted to eligible candidates. Moving forward, the momentum generated by the Thai Government in launching such grant schemes is indicative of a hopeful future where potential capital cash flow difficulties for firms may be mitigated during pandemic-ridden turbulent times.
Looking ahead, we can see that there exists more effort to accompany startups along their life cycle instead of mere fund providence. This serves as a key direction that forms the foundation of sustainable growth in the Thai startup scene.
Editor’s choice of the country’s top 10 emerging tech startups.
Hospitality & Wellness SaaS
Hospitality & Dining SaaS
Lifestyle, Search Engine
Editor’s pick of which ‘Featured Startup’ is especially worth following and why.
Editor’s choice of the industries with the most potential for technology disruption and growth.
Editor’s perspective of the maturity level of talent in the ecosystem.
Editor’s commentary on how the country’s culture and history have impacted the ecosystem.
The traditions and social hierarchy of Thailand touch all aspects of everyday life, including business. Thai corporate culture upholds a traditional top-down approach to management and innovation, a dynamic that is not ideal for out-of-the-box thinking and disruptive innovation. With this, there are relatively fewer Thai entrepreneurs and startups accompanying a conservative mindset and general risk aversion. This is in line with a more practical mindset to secure a steady income, which means that higher tiered talents tend to flow towards more established positions elsewhere apart from startups.
As of 2022, there are over 1000 startups in Thailand, equating to approximately a startup per 70,000 people. In comparison, the startup densities (startups/population) in Israel, the United States, and Singapore range from one startup for every 2,000 to 3,000 people.
Overhauling the traditional Thai corporate mindset is a necessary step to encourage more risk-taking and out-of-the-box thinking in the workplace. The good news is that the Thai government has vocally noted its support and capital for increased investment in technology and entrepreneurship. That said, as mentioned above, government regulations need to evolve in accordance with the new focus on technology. Chief among these is the Foreign Business Act, which limits foreign shareholding of Thai businesses across certain industries.
Despite the cultural pressures, there is a big shift of the mindset among new graduates. These days we have witnessed the positive trends of the young generation in Thailand becoming more actively involved in the local startup scene. With large scale hackathons such as the annual Education Disruption Hackathon held by Disrupt Technology Ventures, more attention is drawn to the space. Moving forward, it is foreseen that such initiatives will continue to be launched, supplementing the foundation to the Thai startup scene.
Interested in becoming more involved in this ecosystem and connecting with local ecosystem leaders? Let us know.
500 TukTuks (Bangkok): The local operation of global seed investor 500 Startups. Beyond providing seed capital, 500 supports startups via their Seed Accelerator Programs that emphasize digital marketing, customer acquisition, lean startup practices, and fundraising for pre-Seed companies. (Source: 500 Tuk Tuks)
Add Ventures (Bangkok): Invests in Series-A rounds and later stage startups with a focus on smart agriculture, robotics and automation, supply chain optimization, and energy efficiency management. (Source: Add Ventures)
Ardent Capital (Bangkok): Invests in early stage technology companies across Southeast Asia with a focus on eCommerce opportunities - including sourcing, fulfillment, retail, demand generation and payment gateway among others. (Source: Ardent Capital)
Ascend Group (Bangkok): Utilizes cloud data and digital technologies to offer nano-finance and credit services that improves the underserved quality of lives and business opportunities. (Source: Ascend)
Beacon Venture Capital (Bangkok): Invests in early to growth-stage technology startups covering not only financial technology (fintech) but also consumer internet and enterprise technology such as artificial intelligence (AI) and enterprise IT. (Source: Beacon Venture Capital)
Cento Ventures (Singapore): Invests in series A startups with a focus on applying innovative business models to large industry sectors that are set in their ways, using technology as an enabler. (Source: Cento Ventures)
Digital Ventures (Bangkok): A subsidiary of The Siam Commercial Bank (SCB), was established in February 2016 to uncover innovations and redefine banking in a digital era. Amidst an ever changing fintech landscape, DV's strategy is to invest in, experiment with, and integrate technological innovations for SCB. (Source: Digital Ventures)
Galaxy Ventures (Bangkok): Invests in seed stage startups with a focus on innovative technologies and services. (Source: Galaxy Ventures)
Golden Gate Ventures Thailand (Singapore): Invests in early stage startups with a focus on internet & mobile startups across many sectors, including e-commerce, payments, marketplaces, mobile applications, and SaaS platforms. (Source: Golden Gate Ventures)
Inspire Ventures (Bangkok): Invests in early stage and high growth businesses that are scaling proven, and sometimes novel, business models in the Southeast Asia markets with a strong emphasis on localization. (Source: Inspire Ventures)
InVent (Bangkok): Invests in early to growth-stage tech startups focusing in Thailand and overseas, regardless of sector from digital lifestyle consumer to digital enterprise and emerging technologies. (Source: InVent)
Jungle Ventures Thailand (Singapore): Invests in consumer brands for the digitally native; platforms that enable digital transformation of SMEs; global technology leaders born in Asia. (Source: Jungle Ventures)
K2 Ventures (Bangkok): Invests in start-ups with a focus on technological changes that have the potential to greatly impact society. (Source: K2 Ventures)
Krungsri Finnovate (Bangkok): Invests in growth stage, Series A or later stage start-ups with a focus on fintech. (Source: Krungsri Finnovate)
Line Ventures (Bangkok): Engages in flexible investment opportunities on a global scale, in areas such as Japan, the United States, China, Southeast Asia, and more. (Source: Line Ventures)
Monk's Hill Ventures Thailand (Singapore): Invests in post-seed stage tech startups that will take advantage of the fast growing Southeast Asian markets. (Source: Monk's Hill Ventures)
PTT (Bangkok): Invests in startups with a focus on technologies that electrify energy system, enable better transportation, make energy usage more efficiency, enhance sustainability, enable the use of internet of things in industries and other new kind of solutions which could become growth drivers. (Source: PTT)
Singha Ventures (Bangkok): A corporate venture capital unit of Singha Corporation, part of Boonrawd Brewery Group, that invests in startups with a focus on consumer products, logistics, and enterprise solutions. (Source: Singha Ventures)
Siri Ventures (Bangkok): Invests in startups with a focus on construction tech, property tech, food tech, and health tech. (Source: Siri Ventures)
AIS The Startup (Bangkok): A program run by leading telecom in Thailand offering select startups support across technology, market development, and business model development. It hosts monthly pitching events offering 5 startups the chance to pitch. (Source: AIS The Startup)
Activator (Bangkok): A program focusing on co-creating new insurance technology ventures. (Source: Activator)
Bangkok Innohub (Bangkok): A dedicated champion will be assigned to each startup to understand their unique needs. Mentors from Bangkok Bank’s business and technical teams will guide each startup towards a potential pilot that will help them secure meaningful partnerships in the future. (Source: Bangkok Innohub)
Depa Accelerator Program (Bangkok): A smart city accelerator program aiming to develop potential digital startups and maximize growth opportunities from national scene to regional level. (Source: Depa Accelerator Program)
Dtac accelerate (Bangkok): A 3-month program that will bring together an amazing community of entrepreneurs, experienced mentors and investors with a common trait to dream big and making an impact on the world of technology. (Source: Dtac accelerate)
ImpacTech (Bangkok): A program for startups who use technology to tackle social issues. ImpacTech aims to empower social tech startups in Thailand and create a vibrant social tech community of startups and supporters. (Source: ImpacTech)
Krungsri Rise (Bangkok): Works with corporates and government across Southeast Asia to run a tailor-made “Growth Accelerator” program that creates an environment for startups and corporates to create a win-win partnership that can drive the local economic growth, technological and innovation progress, and improve the standard of living for Southeast Asia (SEA). (Source: Krungsri Rise)
SPARK Thailand (Bangkok): Supports high-potential Thai startups in early-stage through intensive mentoring sessions with regional and international experts to guide and improve startups’ capabilities, products and solutions to reach the global market’s needs. (Source: SPARK Thailand)
SPRINT Accelerator Thailand (Bangkok): The first specialized accelerator and incubator for science and technology in Thailand. (Source: SPRINT Accelerator Thailand)
The FinLab (Bangkok): Operates acceleration programs focused on propelling the growth of innovation financial technology (FinTech) and technology companies and catalyses the digital transformation of businesses. (Source: The FinLab)
True Incube (Phra Khanong): Program that selects high potential startup businesses to help scale and form synergies within the TRUE and CP Conglomerate. At the same time, our goal is to help drive a thriving startup ecosystem here in Thailand by providing the support and opportunities to connect and grow startups wanting to take their businesses to the next level. (Source: True Incube)
Techsauce Global Summit (Bangkok): A diverse cultural festival that goes beyond tech into music and fashion. Mix with communities such as social entrepreneurs, musicians and artists, filmmakers, athletes, LGBTQ and more. (Source: TechSauce Global Summit)
Bangkok Technology Entrepreneur OpenCoffee Meetup (Bangkok): A fixed time and place where entrepreneurs, investors, developers and visionaries can get together in a truly informal setting to meet, chat and make connections. (Source: Meetup)
Bitcoins in Chiang Mai (Chiang Mai): Meetup to talk about Bitcoin and other promising applications of blockchain technology. (Source: Meetup)
Internet Entrepreneurs Network (Thailand) (Bangkok): A group for anyone who is interested in internet entrepreneurship and internet marketing. (Source: Meetup)
TechGrind Bangkok (Bangkok): An online and offline community with the sole focus of enabling entrepreneurs from all walks of life to succeed in building their ventures. (Source: Meetup)
DBD: The Department of Business Development establishes quality standards for Thai businesses. (Source: DBD)
DEPA: The Digital Economy Promotion Agency aims to support and promote the development of digital industry and innovation, support and promote digital technology adoption. (Source: DEPA)
DGA: Provides digital technology infrastructure services and service systems or fundamental applications engaging with digital government. (Source: DGA)
ETDA: Created to meet the economic structure that has changed from an analog society to a digital society, an era where everyone can access information at the touch of a finger. (Source: ETDA)
NIA: Supports Thailand’s innovation system, in both the way of improvement and initiation, to promote economic restructuring and competitive enhancement. (Source: NIA)
NSTDA: National Science and Technology Development Agency (NSTDA) aims to promote research, development, design and engineering (RDDE) until it can be transferred to use and promote human resource development and infrastructure in the areas that are needed to build competitiveness and sustainable development of the country. (Source: NSTDA)
SEC Thailand: Ensures a fair, efficient, dynamic and inclusive capital market. (Source: SEC Thailand)
Software Park Thailand: A government agency under the National Science and Technology Development Agency, it was established to stimulate the development of the Thai software industry. It has also maintained a close association with the private sector. (Source: Software Park Thailand)
Startup Thailand: A national organization that was established to support and promote Startup and Startup Ecosystems in accordance with the policy of the National Startup Committee (NSC). The Ministry of Science and Technology is the primary responsible unit for Startup Thailand. (Source: Startup Thailand)
Thailand Board of Investment: Aims to promote investment in Thailand and Thai overseas investment to enhance Thailand’s competitiveness, to overcome the “Middle Income Trap” and to achieve sustainable growth in accordance with the sufficiency economy philosophy. (Source: Thailand Board of Investment)
Chulalongkorn University - CU Innovation Hub (Bangkok): Through research, education, competitions and activities, the center is responsible for developing the creativity, critical thinking, and entrepreneurial skills of CU students and personnel, and distributing innovative ideas for the benefit of the society and economy. (Source: Chulalongkorn University - CU Innovation Hub)
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