Thailand’s National Innovation Agency (NIA) expects the birth of at least one to two unicorns in Thailand with a valuation of $1 billion within the next five years, as reported by Startup Thailand. “But to attain the home-grown unicorn status, Thailand’s tech ecosystem will need strong support from global investors,” said executives representing Thailand’s startup ecosystem, tech media, and corporate venture fund (CVC) at a recent TechNode event.
On stage at ORIGIN Thailand, an event hosted by TechNode Global during the True Digital Park Grand Opening, four industry experts discussed the effort of building Thailand as the next Southeast Asia’s digital hub.
“In recent years, Thailand has witnessed a significant growth in the funding size and the number of local startups getting funded,” said Thanasorn Jaidee, the president of True Digital Park, Thailand’s first and largest startup hub, TechSauce’s Co-founder Oranuch Lerdsuwankij (Mimee), and Poompong Tancharoenphol, Investment Manager at AddVentures by Siam Cement Group. More Thai startups have received funding in 2018 as compared to the year before, with the food tech industry in the lead, as reported by TechSauce.
Startups to win over investors by expanding regionally
“Venture capital investors are flocking into Southeast Asia for a few good reasons,” said Tancharoenphol, “A number of Chinese VCs are increasing their investment in South-east Asia tech start-ups in recent years.”
“A collective effort among government, VCs, media, and corporates, facilitates more opportunities and international growth expansion,” said Jaidee, adding that many Thai startups are planning to expand regionally.
“Startups related to e-commerce, logistic, supply chain, food, and agriculture have huge potential to grow in Thailand,” said Mimee. “Thailand is strong in these industries and we can reach a one billion valuation if we integrate technology vertically,” added Tancharoenphol.
Corporates in Thailand have begun plugging themselves into the startup ecosystem and started diversifying their investments, setting the nation’s investment trend. “The key is bringing corporates and startups together to co-innovate a solution to achieve a win-win situation,” said Lerdsuwankij, noting that it is not as simple as facilitating a POC engagement between corporates and startups.
“In order to reach the unicorn stage, Thai startups need to think beyond Thailand. They need to think of ways to expand regionally (in Southeast Asia) to attract global investors from other regions such as China, India, or even the US to come in (to Thailand) and actually build the unicorn up,” said Tancharoenphol.
Thailand is paving its way to being the digital tech hub in SEA
“From investors’ perspectives, we like to invest in companies that think regionally from day one”, said Tancharoenphol. Southeast Asia, a sub-region of Asia that consists of 11 countries, albeit highly fragmented, is a sizeable market. “Indonesia has the biggest population in this region while Vietnam has the fastest-growing market, each country has its own strength to compete,” said Tancharoenphol, noting that Thailand’s economy is great for startups given its affordable cost of living with a large tech-savvy customer base.
Investing in skills is vital to a country’s economic growth and competitiveness. “Enterprises in Thailand are offering upskilling programs aimed at enhancing the digital competencies of individuals and organizations,” said, Jaidee. “Instead of leaving the educating effort to universities, enterprises are doing their part to meet the changing demands in an era of digital transformation,” he added.
However, Lerdsuwankij said that more could be done to attract and retain foreign corporates in Thailand. Given the strong infrastructure and attractive incentive policies that a neighboring country such as Singapore has in place, Thailand has to work on improving its government policy and offering stronger support for local and international companies. “Streamlining visa applications can be a good head start,” said Jaidee. “Revising government policy by removing hurdles of doing business in Thailand and clearing the way for safe foreign investments can help attract foreign companies,” he added.
Is the current US-China trade war a boon for Thailand?
Emerging Southeast Asian economies are seen, by many, to be the winners from the US-China trade war. However, although our speakers recognize the economic gains shifts due to the political situation, they believe that a strong infrastructure has to be in place in order to truly benefit from it.
“Thailand is essentially located in the Indochina region and has strong supply chain industry, food, and agriculture infrastructures,” said Tancharoenphol. “Southeast Asian companies should position themselves and choose the right country best-suited for their industry in order to actually gain a competitive advantage.” Likewise, Jaidee said that Thailand can be a beneficiary country from the trade war if its infrastructure is optimized with strong support from the Thai Government.