Thailand’s start-up ecosystem not-so-glorious due to economic challenges
Thailand’s start-up sector may not be so booming due to the ongoing global economic challenges, while many early-stage start-ups suffer a lack of support as they struggle to attract more funding.
Techsauce Media’s CEO and Co-founder, Oranuch Lerdsuwankij, revealed on Monday that Thailand’s start-up funding has been increasing in recent years, with a total value of US$530 million in 2022. The number of start-up deals this year has, however, reduced by half, with only 36 deals, compared to about 60 last year.
As most of the funding is still concentrated on larger start-ups, those in the early-stage are struggling to receive support from investors.
“It’s the biggest challenge for start-ups, after COVID-19 and the economic recession,” said Oranuch. “So how can we help the start-ups in Thailand, especially those in the early-stages, to attract funding, not only start-ups in their growth stage?”
-Ecosystem in crisis?-
According to StartupBlink’s Global Start-up Ecosystem Index 2022, Bangkok is ranked 99th worldwide, a huge fall from last year by 28 places. As disappointing as it seems, Thailand’s start-up businesses still have a lot of potential.
“There’s a lot of bias around [the rankings],” said Charle Charoenphan, the Director of Thailand Accelerator program.
“Our rankings are pretty low, because people around the world don’t know enough about Thailand. They don’t know how many start-ups there are or how many venture capitalists we have. Everyone’s doing their own thing, they’re still in their shells and they’re not out there yet.”
With an aim to improve its rankings, to be at least in the world’s Top 20, mentorship and the right collaboration are the most important elements in elevating the start-up ecosystem in the country.
“Bangkok is a metropolis right? We should have a very strong start-up ecosystem. We have good start-ups that need funding. All we need to do is to attract more mentors and venture capitalists to come and invest in these early stage start-ups. With that lead, everyone else will follow, and that should actually enhance our ranking.”
In terms of government support for the start-up sector, Oranuch noticed that there have been changes in the rules and regulations for doing business. She still hopes, however, that there will be more incentives to attract foreign investment.
“I think there are some rules that they have already adjusted. For example, the capital gains tax, which is one of the good example. We hope and expect to see more support, in terms of incentives, to bring the foreign investors to Thailand.”
Thailand Accelerator-
To improve the start-up ecosystem, a start-up accelerator platform, called “Thailand Accelerator”, was launched on Monday, to provide more support for early-stage start-ups in Thailand, from mentorship and building connections to help with scaling up their businesses in Southeast Asia.
“There are a lot of good entrepreneurs and founders in Thailand,” said Charle, “but if they don’t have the money, they won’t be able to raise any funding. So that’s what we’re trying to change.”
“I think this will reignite the start-up ecosystem again, to some level,” he said.
“I think one of the keys to success in driving the tech-ecosystem is collaboration. How can we support each other and not compete with each other? I think it’s the most important thing,” Oranuch concluded.
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