Supportive ecosystem pushes Thai tech start-ups forward
Local and global companies stand ready with funding
Thailand is a hot spot for the Asian boom in tech start-ups, having grown continuously for several years. A lot of these start-ups are finding success through a supportive ecosystem, especially investments, acceleration programmes, conferences and other events.
One key event is the “Start It Up Conference”.
Oranuch Lerdsuwankij, co-founder of Techsauce, a partnership of Thumbsup.in.th and HUBBA Coworking Space, is an organiser of the conference. She said the ecosystem of tech start-ups in Thailand was still rapidly growing, and it was time to accelerate their establishment and to expand their markets.
Oranuch, a member of the Thailand Tech Start-up Association, said 80-90 per cent of tech start-ups in Thailand were in the early stage when they needed investment to scale up their business.
Some international investors have already backed Thai tech start-ups, such as Silicon Valley-based 500 Start-ups, and others are showing interest, such as Garage Technology Ventures, Tokyo-based early-stage venture-capital firm Global Brain, and Taiwan’s appWorks Ventures.Takashi Sano, Global Brain Singapore principal and regional manager, said during the Start It Up Conference that Japanese investors were interested in tech start-ups in Southeast Asia because of the region’s economic growth. Thailand is among the top markets in the region. Thailand has similarities to Japan in that it is a large non-English-language market.
Silicon Valley-based Garage Technology Ventures is a seed and early-stage venture-capital fund looking for emerging technologies in Asia.
Garage has funded more than 150 emerging-technology companies, including many that have become leaders in their sectors, such as Pandora Media, Motley Fool, LeftHand Networks, Tripwire, Coremetrics, Simply Hired, CaseStack, D.light Design, and WhiteHat Security.
Of the 150 start-ups Garage has invested in, about 45 have failed. Of the survivors, 55 companies have made profits, of which eight went public and 47 were acquired by other companies, said, managing director at Garage Technology Ventures.
Garage Technology Ventures currently has US$40 million (Bt1.4 billion) in funding for tech start-ups. It provides seed funding in these outfits’ early stage.
“We designed Garage to have the ability to reach out to entrepreneurs through different programmes. We do conferences, write books, we go around the world to participate in programmes like DTAC Accelerate, where we can reach, touch, and hopefully educate and coach a lot of entrepreneurs in the group,” Reichert said.
One of the mentors of DTAC Accelerate Batch 3, he said there were two main types of entrepreneurs. The first type sees a local problem and designs a company to address that local problem without going beyond that frame of reference. The second type starts a company with the aim of addressing local problems, but thinks global from Day 1.
“The two main characteristics of a successful entrepreneur are a sense of urgency and [toughness]. Moreover, a strong team is important. It is about the team’s ability to provide solutions to a target market and to protect its position as market leader, called an ‘unfair advantage’,” Reichert said.
“Since we are a small fund, a seed fund, our approach is to find partnerships with local investors who know the industry well. We have no plan to invest in Thai tech start-up companies, we consider investing in start-ups registered in the US.”
Garage Technology Ventures recently launched a new strategic investment fund, its fifth since the firm was established in 1998. The fund is designed to give investors access to emerging technologies with the potential to have a global impact that may be strategically relevant to the investors. The new fund has an international component, tapping into opportunities to leverage Garage’s strong cross-Pacific connections.
The standard Garage initial investment is between $250,000 and $500,000. In partnership with the fund’s investors, however, Garage has the ability to invest up to $5 million in a single company.
The fund has a stated interest in technologies in the areas of enterprise and cloud, software and services, mobility, consumer Internet, digital media, intelligent systems, robotics and the Internet of Things.
Taiwan’s appWorks Ventures is also interested in investing in Thai tech start-ups, especially those interested in going out across the region.
Jamie C Lin, founding partner of appWorks Ventures, said it knew the Taiwan market very well, so it could help Thai start-ups that want to penetrate the island.
On the other hand, he said, start-ups in Taiwan were quite vibrant – every year around 100,000 are launched and 300 to 600 receive investment from venture-capital funds. The venture-capital industry as a whole in Taiwan is worth around $5 billion.
Most of the start-ups that have received funding in Taiwan are Internet companies, with e-commerce, mobile games, digital advertising, and Internet of Things among the key areas.
Tech start-ups in Taiwan are similar to tech start-ups anywhere: They try to get established in the market they know best, and that is the local market. Once they do that, they look abroad, and Thailand is a top choice.
“The economy of Thailand is the best across Southeast Asia. GDP per capita is the highest in Southeast Asia, [after] Singapore. Thailand is a big market where consumers are ready to spend, so Thailand is the best market for them,” Lin said.
AppWorks has invested in 226 start-ups, all of them are Internet businesses.
Meanwhile, large corporates in Thailand such as Loxley and G-Able Group are now looking at investing in tech start-ups.
Nart Liuchareon, chief executive officer of G-Able Group, said the company was interested in helping new tech start-ups that come up with innovative technologies that can create a competitive advantage for the company in the current digital era.
“We have started an internal programme with the aim of finding new innovative products, services and processes. We have not yet set a budget for investing in tech start-ups. We are still studying and looking into investing in newly emerging technologies. We are looking to expand. We realise that big corporates need to keep differentiating themselves from others in order to have a competitive advantage,” Nart said.
Pajaree Saengcum, vice president of G-Business, a subsidiary of G-Able Group, said the company was looking to invest in tech start-ups in two main domains, big data and mobile. ASK-DOM is the first one in which the company invested.
“We have requirements or problems in mind that we need tech start-ups to address. We will call for them to pitch ideas. We will offer seed funding to the winner. We will incubate and invest in the early stage.”
Advanced Info Service or AIS will tomorrow kick off its 5th year of start-up programme called “AIS – The Start-Up 2015” under the them of The News Generation of Digital Partnerships.
Meanwhile, InVent, a corporate venture capital project of InTouch Holdings, which invests in high-growth technology companies in Thailand and Southeast Asia, has this year set aside Bt240 million for investing in tech start-ups.
InTouch vice president Thanapong Na Ranong, as head of InVent, said its fund is set to invest in four start-ups each year.
Its first investment was in Ookbee, the digital publisher, with $2 million. It has now invested in six start-ups, the others including $7000,000 in Sinoze; $1.5 million in Playbasis; $1 million in Computerlogy; $500,000 in Infinity Levels Studio; and Bt5 million in Meditech.
Meanwhile, Natavudh Pungcharoenpong, 500 Tul Tuks Fund manager, said at the BKK Start-up Job Fest on Saturday that by the end of this year, it aims to invest in 20 start-ups, three of which it has already invested in, with investment in seven more expected next month.