This is a guest post by Richard Armstrong who is an early stage investor in many startups in both SE Asia and globally. Plus Richard has cofounded several companies.
Guest Author: Richard Armstrong
Not long ago I read BCG’s excellent report on Thailand’s startup ecosystem. If you haven’t read it… I highly recommend you check it out.
I enjoyed it so much I decided to summarize here some of my big takeaways and give some of my own opinions.
First, it makes the point that Thailand has great potential
Meaning it has the second largest GDP among the ASEAN-6, 90% of households have internet access, 83% of the population are using e-Commerce, and the average person spends 9:06 hours on the internet.
I mean this is just massive.
And i’ve been saying this for a long time. Thailand’s size and characteristics warrant a tech ecosystem many times bigger than it is currently.
Given this backdrop… there should be tons of tech startups coming out of such an ecosystem.
Despite this potential, there are few startups
The report makes the point that there are about 180 startups, as documented in the Tech in Asia database.
While this isn’t exactly exhaustive it does give a good indicator as it is far behind everyone else as you see here.
Having grown up in Thailand and invested in quite a few companies, I know this all too well. There’s just not enough startups here
And one of the key reasons has been a lack of funding at various levels
What does funding look like?
Here are the startups that the report shows have received funding. I know the founders in many of these companies and was generally impressed with how exhaustive the report is.
They really did their homework.
The report makes the point that there is a very low number of startups that made it to Series A and beyond.
Among these four have achieved ‘Unicorn’ status:
- FlashExpress, an e-commerce logistics provider currently at Series F,
- Ascend Money, a digital financial services provider with TrueMoney being its flagship product, now in Series C
- LINE MAN Wongnai, an e-commerce platform offering diverse services including food delivery, grocery dispatch, and restaurant solutions, currently at Series B
- OPN, a fintech solutions and products provider, at Series C
The report then goes into some case studies
So the report does deeper case studies on four different companies, all of which I am a bit familiar with. They are Rabbit Care, Pomelo, Ricult, PropertyScout and APX.
One thought I had was how the first two companies are deeply rooted in Rocket Internet, which was a big part of the foundation of entrepreneurship here in Thailand.
Back in 2012-15 companies like Lazada and Zalora flew in hordes of highly talented, young expats from top universities abroad to start their ventures. In part because the ecosystem of local entrepreneurs was still not developed.
It is from these roots that folks like Johannes von Rohr and Micheal M. Steibl, both former MD’s at Rocket Internet who then started Rabbit Care, came.
As well as David Jou, the Founder and CEO of Pomelo Fashion whom I have met on a number of occasions. Both he and Casey Liang were former MD’s at Lazada Group in Thailand.
Rocket Internet, for better or worse, was an important part of the foundation of our tech ecosystem here.
Finally, the report covers why it thinks Thailand is poised for massive growth
The report mentions that there is increased government support for startups and a much larger VC and CVC funding pool that is growing quickly. I agree with all of these things.
I also think that Thailand is kind of the ‘natural’ base for foreign entrepreneurs here in SE Asia. So all it needs is to make things like getting a visa and starting a company easy, and the rest will take care of itself.
Just look at how many digital nomads come here to Thailand already. Many of them are friends of mine and I can tell you that they love it here and tend to stay a long time.
They come from all over Europe and the US to start and work in digital ventures. Just not Thai startups… because there aren’t enough of them.
Why do they come to Thailand? Simple.
- It is one of the cheaper countries in the region
- The tourism infrastructure is terrific meaning it is very easy to get around and live a good life.
- The people and culture are very welcoming to them.
- There are lots of other talented foreigners living here already.
Friends sometimes ask me what country I think is most developed in terms of its tech ecosystem here in Southeast Asia. And I always begrudgingly answer either Singapore or Indonesia depending on what angle you look at it from.
But who should naturally be the best? Thailand!
So let’s make the tech ecosystem in Thailand great!
