Thailand is today known the world over as a potential testing ground for start-ups, thanks to an abundance of affordable resources and a supportive government. Thai start-ups are also attracting both local and overseas venture capitalists with some showing so much promise that they will reach Unicorn status soon.
Tech start-ups in Thailand have seen tremendous growth in recent years and the current number of entrepreneurs funded by venture capital and investors now totals more than 100. Funding for start-ups has increased at a rapid rate over the past decade, soaring by 4547.6% from USD$2.1 million in 2012 to USD$97.6 million in 2019 according to Techsauce. So far this year, more than USD$130 million has been committed.
Access to funding is one of the most important factors if start-ups are to continue to innovate and upgrade their products and services while also expanding their business overseas. This became easier in 2016-2017 when Thailand’s leading commercial banks launched venture capital subsidiaries to promote innovations and redefine banking in the digital era. They are Bualuang Ventures, Krungsri Innovate, Beacon VC, and Digital Ventures. Krungthai Bank followed, establishing KT Ventures in April this year.
Other Thai venture capital firms based in Silicon Valley, namely 500 Tuk Tuks and SeaX Ventures, are funding start-ups all over Southeast Asia. Meanwhile, the leading venture capital firms in Asia, Openspace Ventures, Golden Gate Ventures, Insignia Ventures Partners, Vertex Ventures, Gobi Partners and Monk’s Hill Ventures, are adding Thai start-ups to their portfolios. KK Fund, a Singapore-based venture capital fund, launched its first Meet your Match Thailand session in March, aiming to match 20 investors to Thailand-based start-ups.
In addition, three state enterprises – PTT, the Electricity Generating Authority, and the Industrial Authority of Thailand – have provided funding to start-ups through InnoSpace Thailand Co., Ltd., a joint venture between the public and private sectors.
Reaching the unicorn stage with a company value of over USD$1 billion is the dream of every start-up. FinTech is regarded as having the most potential to achieve unicorn status with HealthTech coming in second.
SYNQA (formerly Omise Holdings), the leading online payment gateway, is expected to be the first unicorn in Thailand. Founded in 2013, Omise is leading the charge in the next wave of financial innovations, offering a wide range of processing solutions for online businesses.
After raising undisclosed funding from Nomura Holdings last year, its parent company SYNQA secured USD$80 million in a series C funding round in June 2020 led by SCB 10X and SPARX Group. This funding will reinforce SYNQA’s capacity to develop services and a technology stack for merchants and businesses across Asia.
Finnomena, a leading Thai FinTech start-up in wealth management and one of the strongest startups in Thailand, is planning to expand its business into Asean member countries and has set a goal of increasing assets under management (AUM) from over USD$270 million to USD$3 billion (90 billion baht) by 2023. It raised capital of $13.5 million through a Series B funding round in January this year.
Other successful start-ups include FlowAccount, Claim Di, aCommerce, Ookbee, Pomelo, Eatigo, Hubba, Flash Express (Thailand), Freshket, and QueQ.
Dr Nuttapon Nimmanphatcharin, President and CEO of the Digital Economy Promotion Agency (depa), says that in fiscal 2021, it will place major emphasis on strengthening Thai start-ups from seed stage to reach the “Series A” level and has also set the ambitious goal of creating the first Thai unicorn within the next 12 months.
In addition to Fintech, Agricultural Technology (AgTech), Travel and Tourism Technology (Travel Tech), Health Technology (Health Tech), Educational Technology (EdTech) and Food Tech are targetted to achieve exponential growth.
Thailand’s vibrant start-up ecosystem with state-of-the art infrastructure is creating more communities to connect international start-ups, entrepreneurs, tech companies, accelerators, incubators, academia and government agencies.
The depa is developing the Thailand Digital Valley on a 30-rai plot in the Eastern Economic Corridor of Digital (EECd) or Digital Park Thailand.
Dr Nuttapon said that the first building, the Digital One Stop Service Centre, is complete and its leasable areas are already fully occupied by startup companies. Another three buildings, the Digital Start-up Knowledge Exchange Centre, the Digital Co-creation & Innovation Centre, and the Digital Edutainment Complex and Digital Go Global Centre are under construction.
The Thailand Digital Valley also provides business-matching opportunities for start-ups to partner with global companies.
In late September, WHA Industrial Development Plc, Thailand’s leading developer of industrial estates, and TusHoldings, a top Chinese Science and Technology service group, announced the establishment of a joint venture company, WHA Tus Co., Ltd., as an innovation and incubation centre for start-ups.
Located in Chulalongkorn University, TusPark WHA Incubation Centre will create an innovation ecosystem in partnership with Chinese government authorities, universities and research institutes to enhance the development of Thai start-ups and provide a bridge for Thai entrepreneurs to access China’s technology, talent, investors and markets.
True Digital Park, Thailand’s first start-up ecosystem with an “Open Innovation” concept, created the Groundbreakers Club in October last year, the first exclusive community of successful start-up founders who will come together to further elevate the start-up scene in Thailand.
In addition, SPACE-F, the first global FoodTech start-up incubator and accelerator in Thailand, is launching Batch-II of its world class Accelerator and Incubator programme, connecting leading corporates and startups in foodtech.
Founded through the cooperation of Thai Union Group, the National Innovation Agency and Mahidol University, SPACE-F serves as a central platform gathering resources from corporates, VCs, CVCs, universities and government to develop and promote deep-tech and innovative FoodTech start-ups with speed and efficiency.
Every start-up has to deal with many issues when setting up – legal, financing, sales and marketing, human resources and more – but gradually that burden is being eased as interest in entrepreneurship is at an all-time high.
And it’s not just local start-ups that are leading the way. With a growing number of incubators, accelerators and co-working spaces as well as investors at every level, among them Angel Investors, Venture Capitalists (VC) to Corporate Venture Capital (CVC), Thailand is an appealing destination for young talent from abroad.
startupthailand.com has been developed as a national platform to support and encourage the growth and ecosystem of the start-up in Thailand. It provides incubator and accelerator programmes plus funding from the National Innovation Agency (NIA).
The NIA has also collaborated with private companies to develop a global hub that serves as a “One-Stop Service” and provides assistance to start-ups from their inception until such time as they are up and running. There are two hubs: District C at True Digital Park in Bangkok and Chiang Mai & Co in Chiang Mai province.
Depa’s Digital Start-up Institute is another key government accelerator that focuses on the development of an appropriate ecosystem for the digital start-ups to thrive and capture business opportunities in both the domestic and global markets.
Private firms are playing an important role too in nurturing start-ups in various fields. They include True Incube, AIS the Start-up, Krungsri Rise, Kasikorn Katalyst, KT Ventures, Digital Ventures Accelerator, Siri Ventures and Space-F.
By Patcharee Luenguthai