Slmpoat Chansomboon, director of business innovation and DTAC Accelerate
Slmpoat Chansomboon, director of business innovation and DTAC Accelerate

A year of opportunities for Thai start-ups

Tech January 24, 2017 13:13

By Sompoat Chansomboon
Special to The Nation 

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The start-up ecosystem in Thailand has grown rapidly in the past four years – almost a hundred times in terms of total funds raised. This is due to the improving quality of Thai founders, the relocation of investments from North America and Europe to Southeast Asia, and the serious focus of the Thai government on start-ups.



In 2017, growth will continue. I believe that e-commerce, marketplace and fintech, which were very attractive in 2016, will continue to be the leading trends in 2017, focusing more on commercialisation to the mass market. We may also see more EdTech, ArgiTech, or even upcoming trends like Artificial Intelligence, Deep learning machine, and Blockchain technologies starting to be present in this market. 

Establishing a start-up business is not difficult; but it is also not that easy. You need to find your first 100 customers who love your product, and from that, you can build your first one million customers who like your product. The first driver is tech talent boom, where being a tech entrepreneur, or joining a start-up company becomes a dream career for the young generation. This will add more talent to the industry. An interesting fact is many Silicon Valley-based Thai talents are moving back home, as they can see clear opportunities from growth and the advanced ecosystem, which will help to transfer knowledge from Silicon Valley to Thailand.

The second driver is support for early stage start-ups is easy to find. The government agencies and corporations will aggressively drive the ecosystem. The access to knowledge will be easy. A good case study is the success of Startup Thailand 2016 organised by the Ministry of Science. It was a free event that attracted over 30,000 participants, brought in 100 overseas and local speakers, and exhibited approximately 200 start-ups.

The event created a hype among entrepreneurs and the public. Resources for IT, marketing, and other professions are open for free. Many corporations, both local and overseas, launched programmes to support the start-ups. An exceptional example would be DTAC Accelerate which is DTAC’s programme for providing pre-seed investment (US$15,000 to $400,000 per start-up), co-working space, and marketing for start-ups. It has been 4 years with 21 start-ups with approximately $50 million company valuation under its portfolio.

It is now recognised as the best start-up programme in Thailand. Tech giants such as Facebook, Google, AWS, and Microsoft are also providing free resources to qualified start-ups, creating the connection to the regional ecosystem from here.

Techsauce Summit 2016 was another successful event. It was the first regional scale tech conference hosted in Thailand, organised by local tech media, techsauce.co. It brought in world class speakers and got the attention from 3,000 attendees, including domestic investors, media and key players in the Southeast Asian start-up scene.    

The early stage start-ups will have a higher rate of successful fund raising in 2017 than last year. The money will come from both local and overseas investors. Corporate venture capital will be the key driver of local investments. Leading local banks such as Siam Commercial Bank, Kasikornbank, and Krungsri have announced dedicated funding focus in fintech with combined fund size of more than $100 million. Hopefully, there will be announcements from large corporations in other industries as well.

Venture capital funding in Asia doubled from $8.9 billion to $17.2 billion in the past 12 months. Essentially, new funds dedicated to Southeast Asia alone have doubled in the past year – increasing from an impressive $680 million in 2015 to a gargantuan $1.35 billion in 2016, with Sequoia, Rakuten, and B Capital. The relocation of investment from North America and Europe to Southeast Asia will continue. The easing of regulations, such as allowing start-ups to allocate convertible debentures to investors, and extension of tax waiver for venture capital, will help facilitate overseas investors and lift the standard of Thai start-ups to those in other ecosystems in Southeast Asia, eg Singapore, and Indonesia.

Expect big investment deals or big exits

The arrival of Chinese tech giants such as Alibaba and Tencent is a good sign. The biggest acquisition in Southeast Asia – Lazada being acquired by Alibaba –shows that Southeast is a high-potential market. For Thailand, Alibaba’s investment in True’s non-bank business, True Money, the launching of Ali-Pay in 7-11, and Tencent’s joint venture investment with Ookbee’s content business is proof of the potential of the Thai market. We expect to see more giants in the market, hopefully big deals from local start-ups this year. 

Overall, the start-up ecosystem in Thailand will rapidly grow in 2017. It will be a dynamic change through the year, and it will be a year of opportunities and possibilities for newcomers. 

The writer is director of business innovation and DTAC Accelerate.