Thailand Startup Ecosystem Report 2021
National Innovation Agency (NIA), Thai Startup, and Ministry of Higher Education, Science, Research and Innovation have published Thailand Startup Ecosystem Report 2021 as a valuable tool in providing information and aiding the design of future startup support, as well as driving industries and economy to grow in this new age. The report presents an overview of the startup ecosystem landscape in the past year, as a guideline to promote and inspire new startups to have the ability to flourish and grow to conduct business and compete with competitors effectively. Also, increases more conductive to doing business in the Startup Ecosystem to accelerate the creation of new entrepreneurs using scientific knowledge, systematic technology and innovation.
Dr. Pun-Arj Chairatana, Executive Director of National Innovation Agency (NIA), says “Thailand Startup Ecosystem Report 2021 is the 4th report that has been continuously prepared since 2014 together with the cooperation of more than 300 communities including both Thai and foreign startups, investors, education sector, government sector, and related agencies to come up with thoughts and ideas. The community shares the same vision and goals to promote startups in which to increase competitiveness to create new economic warriors in the right course, and ready to push Thailand towards an innovation-based economy and are expected to revitalise the economy and society shortly. NIA also provides opportunities to access and leverage innovative infrastructures such as research support training to develop various skills including the systematic use of knowledge in science, technology, and innovation to add value to Thai startups in a sustainable way.”
The Focus Groups were conducted between April – May 2021, with 5 groups of 105 participants from different startup ecosystem sectors, including Thai and foreign startups which include one of our premium members, Seven Peaks Software, Thai and foreign investors, University and other education-related organisations, and Government agencies and related agencies.
According to the report of the summary information on the major obstacles in doing business in an economic crisis, there are 4 areas of recommendations, including
1) Manpower Readiness
Most startup founders focus on technology development but lack business management skills, not to mention the insufficient technology-skilled labor force. Moreover, many startups struggle to match tech talent’s high base salary, therefore, it was suggested to establish a training center and create an online community platform to reach a new generation of tech-savvy workers to develop entrepreneurial skills. Including receiving partial wage subsidies from the government to help alleviate the expenses of startups companies.
2) Source of Funding
Startups do not have a clear financial plan and business plan, especially the long-term valuation of the company. Moreover, most investors are interested in investing only in certain businesses causing some businesses that are not well-known difficult to find funding. Also, early start-ups did not get enough promotion, as a result, unable to access the credit limit of commercial banks for further business operations. Therefore, it is suggested to support startups to access low-interest loans for product and service development. As well as create a standard for fundraising handbooks to determine the direction of the entire ecosystem and build a platform to collect and publicise fundraising news from domestic and international.
3) Growth & Scalability
Majority of startups still lack experience in dealing with medium and large enterprise customers. They still lack knowledge on marketing and expanding business overseas as well as being inexperienced on financial planning to manage cash flow or grow business efficiently. The suggestion has been made to create an initiative to build a business network nationwide and across the globe. This is to encourage the connection between the startups that have great innovation with the large size enterprises who are in need of innovation to fuel the business. Thai startups should be supported and driven to the global stage where they can make their presence among investors and customers from all around the world.
4) Support from Government & Partners in the ecosystem
Government should have a policy to drive Thai startups to a global scale with the support of financial funding as well as passing rules and regulations that are beneficial to startups growth. There should be a government support initiative that helps fuel the growth of Thai startups to become a “unicorn stage”. The knowledge resources should be built to strengthen the fundamentals along with the area development to encourage and pilot new innovation all towards driving the country to a digital age (Digital Government). Legal processes or regulations should be improved for better flexibility to allow startups to access support from the government through technology (Gov Tech). This technology should be the main access point to facilitate the connection between startups and the government for better communication instead of the old and complicated traditional way along with the Civic tech that allows people to be involved in the government decisions process in passing policy and any improvement to bring more benefits to the citizens.
Not only that, the report also lays out a developmental plan for startups to grow and compete in the market efficiently in all aspects since startups will play a vital role in the growth of the business ecosystem. The board of national startups has laid out 4 key aspects of the plan which includes
- Build up awareness – Building awareness for growth involves creating a centralised public relations and enhancing public awareness and understanding for startups businesses.
- Ease of Doing Business – Building fundamentals structure for startups both in terms of improving rules and regulations for startups in the short – long term and collecting statistics of startups to analyse and make appropriate supporting measures as well as developing areas to pave ways for new innovation from startups.
- Strengthen Ecosystem – Nurturing startups starting with the education reforms to encourage the birth of new startups from the new generations followed by the enhancement of research and development for new technologies along with the creation of new institutions to support the entrepreneurs.
- Incentives & Supports – New measures from the government to fund the startups and more relaxed regulations to encourage overseas investors to invest inside Thailand. The improvement of regulations in the equity market to facilitate the development and growth of the startups alongside the initiation of technology rating and collateral of technology credit.
Although the COVID-19 situation has muted the economic growth from its normal baseline and delayed recovery potential, the aforementioned obstacles are resolved promptly based on all recommendations listed in this Thailand Startup Ecosystem 2021 Report, it is believed that Thailand, with its startup entrepreneurs with their innovation and technology development and skills, will be able to encourage Thailand in overcoming the middle-income country’s trap and becoming a developed country. With all the suggested remedial tasks executed, Thailand is likely a soon-to-be country with high income based on an innovation-driven economy and technology equivalent to other civilised countries. Amid the turbulent world economy and national challenges, the atmosphere of Thailand Startup Ecosystem has been especially lively. It may be considered the busiest ever, which may have been caused by various trends including:
- Large fundraising trend topping over $200 million for Series D+ and Series E rounds.
- FinTech fundraising trend with multiple investors targeting FinTech businesses.
- Business expansion through Merger & Acquisition (M&A) of Thai startups and other stakeholders.
- Blurring of the category between startups and SMEs, as SMEs digitalised and product sales overlap.
For more details, download the Thailand Startup Ecosystem Report 2021 at the website: www.startupthailand.org
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