As Southeast Asia becomes a global hub for innovation and technology, with Singapore, Indonesia, Vietnam and Malaysia leading the pack, some countries, such as Thailand, are still playing catch up. Despite Thai tech startups proliferating in the past few years and the country seeing increased funding, it is still lagging somewhat behind its neighbours, partly due to the recent pandemic.
The Thailand startup ecosystem still requires some help to bring it to the levels of other countries in the Association of Southeast Asian Nations (ASEAN). Government initiatives are critical in developing an environment for the nascent entrepreneurship and innovation infrastructure.
In March 2022, the Thai government’s Board of Investment (BoI) set forth its plans to support deep technology startups in the area through a THB 10 million funding programme, focusing mainly on companies that work in the bio-, circular, and green (BCG) sectors. Such commitments are necessary as the country has seen a 42% decrease in foreign investment applications in the first half of 2022.
We look at what is happening in the Thailand startup ecosystem?
Despite the negative news, some sectors, such as eCommerce and fintech, are still thriving. Additionally, recent VC trends in the country appear to be focused on emerging edtech, healthtech, agritech, and greentech startups, which encourages growth in these industries.
COVID-19 stay-at-home orders helped kickstart the usage of edtech innovations in Thailand as educational institutions scrambled to find remote learning solutions. In Thailand, there are currently over 100 edtech companies operating with established startups such as Conicle, founded in 2014, raising US $3 million in a 2021 Series A funding round and new kids on the block, Edsy, receiving US $150 thousand in accelerator funding in January 2022.
As many online teaching platforms aim to level the education playing field somewhat by offering accessibility and flexibility, venture capitalists and the government are being encouraged to invest as this sector could become essential for Thailand to thrive as a startup hub in the region.
Another technology sector that witnessed growth during the pandemic is the health and wellness industry. In 2019 healthtech startups were beginning to make an impact in the country, but the arrival of the 2020 health crisis spurred growth and witnessed an influx of investment in the market. According to local economic researchers, KResearch, the next five years will see further growth in the sector from its relatively modest 2021 investment levels of THB 300-400 million.
Companies such as Singapore-based Doctor Anywhere are pushing forward with services in Thailand, including online medical consultations and medication delivery services. In November 2021, it acquired Doctor Raksa, an established healthtech company, further penetrating the Thai market.
With a population of approximately 70 million people to feed, food security is of utmost importance in Thailand as the world comes to terms with shortages and price hikes. Luckily for this ASEAN country, agriculture is in a robust state, and technological innovations are enhancing traditional food production methods.
The startup Ricult gives farmers access to essential data and insights to aid their development, optimise yields, and increase profits. It also offers accessible funding and loans to those in the agricultural industry, helping to create a more sustainable and innovative food production sector. In May 2021, the startup landed US $3.5 million in investment from Japanese and Swiss backers to back its expansion plans. Another agritech startup, Freshket, which supplies over 4,000 restaurants with fresh produce, raised US $23.5 million in Series B funding in May 2022, demonstrating increasing investors’ interest in the field.
As threats of ecological disaster increase worldwide, ASEAN countries are deemed one of the most at-risk regions from climate change. Most countries in the region are working toward finding solutions to the impacts of environmental damage, such as flooding and higher temperatures. In Thailand, ranked the 9th most vulnerable country in 2021, startups tackling issues through greentech or cleantech are finding favour, with those focusing on sustainable energy and electric vehicles (EVs) becoming increasingly popular.
The government has pledged to obtain 30% of the country’s power from renewable sources by 2037 and has also supported tax cuts and other incentives for EVs as it tries to clean up the country’s carbon footprint. Currently, the motor industry contributes 10% to the country’s economy, making recent government approval of the Foxconn-PTT partnership to develop more eco-friendly vehicles an intelligent move.
With companies such as Techsauce developing tech summits and events focusing on climate tech, fintech and healthtech, the Thailand startup ecosystem is working hard to establish itself as a hub in the region and catch up with its neighbours. Currently, there are only three unicorns, all in the fintech sector. However, Thai tech startups have the potential to move into the major leagues and bring prosperity and a better standard of living to this rapidly developing nation with some help, foreign and domestic investment, and governmental support.