“Startup Nation”: Dream big, reach for the stars
Thailand to be propelled as “startup nation” through amendments of law, emerging Centaur startups, lure of large VC funding, joint effort with giant corporations and solidifying customer base.
Thailand strives to be a startup nation by nurturing economic warriors and driving innovation as well as new business models in order to make a transition into the 4.0 era. In the past three years, new generations of aspiring entrepreneurs who want to launch their own startups have sparked attention and ignited Thai government’s interest. Co-working space, accelerator, corporate venture capital (CVC) and the kickoff of Smart Visa policy all make ways for a boost to Thailand’s startup ecosystem.
To encourage the growth of its industry, Thailand from now on needs practical plans and policies that can be implemented quickly and beat obstacles startup communities are now facing. The country then will be pushed forward, rising to the “forefront” of Southeast Asian nations. If Thailand is slow to implement these policies, it will certainly lose pace and let other nations being ahead of the pack.
Dr. Pun-Arj Chairatana, the director of the National Innovation Agency (Public Organization), noted that NIA aims to promote Thai startups, seeking expansion into international markets and attracting VC investors to join force in the development of technology. This will help level the standard of Thai startups up, propelling the country to be a global startup destination.
Thailand has great potentials to draw foreign investors, especially the city of Bangkok that is ranked 1st among cities in Asia and 7th in the world in terms of great startup destination.
At present, Thailand has more than 2,400 startups which will be immediately pushed for growth, be it forming a company, raising capital on stock market, or achieving Unicorn status with a valuation of US $ 1 billion.
There will be a speedup in the development of flexible regulatory policies in order that IT and Innovation businesses can be run at ease within National Regulatory Sandbox. In addition, the amendment to the Government Procurement and Supplies Management Act will pave ways for public sectors to procure products and services from startups, thus creating market in the country.
NIA expects that by the end of 2018 the proposed Startup Act will be introduced. The law shall provide investors support to establish a company in Thailand.
Thailand: The Rising Star of S.E.A
Krating Poonpol, the fund manager of 500 Tuks Tuks, said that Thailand emerges as one of the Southeast Asian nations that piques investors’ interest, thanks to the number of mobile phone users and startups as well as an increase in CVC in several industries, which is a promising sign.
For several years, Thai startups nonetheless have been copycats, imitating successful business models in other countries. This isn’t enough. Thai startups need to get their juices flowing and begin to use Deep-Tech researches knowledge. A substantial increase in Deep-Tech researches will prompt Thailand to be an Innovation Hub Destination.
Pushing for the rise of Centaurs
Krating added that Thailand must smash the “bottleneck” because most Thai startups are startups at seed stage and Series A stage with seed capital raised up to US $1 million and US $10 million, respectively. But if we successfully build Centaur startups with the valuation of US $100 million and more to be a showcase for other startups and to draw more massive funds and world-class VC investors into the country, Thai startups community will grow exponentially.
Each year there has been a growth in venture capital. Last year, US $ 105 million had been invested in Thai startups, an increase by 22.7% from 2016 during which US $ 86 million being pulled in.
As a result, Thailand must accelerate the development and boost the strength of its startup ecosystem. Public sector has already well set a policy such as Smart Visa which needs to be promptly executed.
There’s still plenty of room for Southeast Asian nations to attract VC investment. According to the statistics, startup investment all over the world in 2017 started to be on the decline in contrast with the increase in VC funding in this region during the same year. That is the region could lure US $ 2.6 billion across 365 deals, up from 313 deals in 2014 that pulled in US $1.1 billion. During 2015 – 2017, mega-deals went to Singapore-based Grab, Indonesia’s Go-Jek, Lazada and Sea.
Giving rise to Unicorn startups
Dusit Chairatana, the corporate venture capital fund manager at ADDVENTURES which is a subsidiary of SCG, noted that to make Thai startups stand out in a crowd and grow substantially, there must be huge venture capital fundraising with Us $ 1 billion and more in valuation, given that there had already been Unicorn startups like GoJek in Indonesia and Grab in Malaysia.
The rise of Unicorns in Thailand will motivate entrepreneurs, showcasing heroes in startup business and bring tech talents back home, especially the cream of the crop who work for Facebook, Google or Apple as they can see the opportunity for entrepreneurship. Investors, as a result, will be more leaning towards Thailand as promising nation for investment.
But there are still some challenging issues Thai startups need to tackle: A lack of startup talents altogether with some government regulations that have yet to be fixed and improved.