Thailand Startup 2015 Wrap Up: Fundings, Exits & The Corporates

Looking back on 2015 as another year full of excitement with many newcomers, fundings and exits for the Thailand tech startup ecosystem.

Fundings

Biggest deal

Biggest deal of the year goes to fintech category from payment solutions 2C2P’s $7M Series C round from Amun Capital (Hong Kong) and GMO Venture Partners (Japan). We could also congratulate this deal as the first ever Series C deal for Thailand startup scene (2C2P is registered in Singapore but was originally founded and built in Thailand). The round value of $7M is equal to the second highest record which was set by Ookbee’s Series B round in 2014. Thailand’s current biggest round record is held by aCommerce which raised $10.7M in their Series A round in 2014.

Deals breakdown by stage

The year of 2015 boasts the highest number of expansion-stage deals as some of the funded early-stage ventures in 2013 and 2014 successfully grew up and started looking to scale. Note that I use a simple definition for early-stage deals as any rounds prior to Series A (e.g., Seed, Pre-Series A) with a minimum value of $100k and expansion-stage deals as the Series A rounds onwards, including the bridge rounds (e.g., Series A, Pre-Series B, Series B).

Among the rising stars who secured a new expansion-stage round this year include:

• Series C — 2C2P ($7M)
• Series B — Playlab ($5M), WearYouWant (undisclosed)
• Pre-Series B — aCommerce ($5M), Omise (undisclosed)
• Series A — Eko ($5.7M), Omise ($2.6M), Claimdi ($2M), Playbasis ($1.8M), Eatigo (undisclosed), Sinoze ($750k), Golfdigg ($700k), Stockradar (undisclosed)

I would like to also note that at least 77% of these deals involve a foreign investor from various Asian countries, particularly Singapore and Japan.

Investors

Compared to its early days back in 2012 there were just less than 5 VC funds in Thailand and recounting this year there are at least 24 VC funds with a portfolio company in Thailand. Regardless of the source of capital, considering VC funds with a home base in Thailand as local investors, the foreign funds have already outnumbered the locals by 17 to 7. While the majority are focusing on Seed and Series A rounds, expansion-stage startups still have to depend heavily on foreign capital as mentioned earlier.

Talking about value proposition, each investor has their own strengths but I personally perceive corporate VCs’ contribution the strongest. Localization is extremely critical in Southeast Asia region whether you are doing B2B or B2C business. Corporate investors typically have better access to the wider consumer audience, are very well connected with business network across industries, and can also provide a strong local credential in the startup’s subsequent fundraising rounds with foreigners.

Exits

2015 sees three more exits for tech companies in Thailand.

• Social media analytics company Computerlogy was acquired by Yello Digital Marketing, a subsidiary of Yello Mobile (South Korea) for an undisclosed majority stake.
• Real estate review portal Thinkofliving.com was acquired by iProperty Group (Malaysia) for approximate initial value of $6M.
• Lifestyle shopping portal MOXY was acquired by WhatsNew Group (Thailand).

Including other past notable exits such as One2Car.com (to iCar Asia, 2014), Ensogo (to LivingSocial, 2011), Sanook.com (to Tencent, 2010) and Tarad.com (to Rakuten, 2009), the exits so far until now still mainly revolve around first generation technology (i.e., web portals and e-commerce sites) and mostly to foreign buyers.

The Corporates

Following a similar pattern to other countries, Thai banks seem to be the second private sector after the telcos who put an effort in catching up and getting involved with the new wave of emerging tech companies.

Telecommunications

Mobile operators were the very first to join the ecosystem since the early years and still maintain a strong relationship with the startup community. The key change among the big 3 operators in this year is True’s shift of role from incubator to investor.

• AIS continues its focus on their signature annual competition AIS The Startup with THB 1 million grant for the winner as well as the supports on business partnership and overseas opportunities through their regional network with Singtel Group. The Winner of this year is FlowAccount, an accounting SaaS startup which primarily targets the 2–3 million SMEs market in Thailand. InVent, a VC arm of AIS’s parent Intouch Holdings, made three investments this year into music game studio Sinoze, gamification platform Playbasis, and golf course booking app Golfdigg.

Source: www.facebook.com/flowaccount

• True makes a big shift from incubation to investment-focused. Their 99-day incubation program True Incube discontinued after producing two batches in 2013 and 2014 and a dedicated venture fund focusing on bigger strategic investments was set up through its new entity Ascend Group, a spin-off subsidiary of C.P. Group and True Corporation. In this year we also see True started to do later investment rounds as they participated in the $2.6M Series A round of an online payment startup Omise.
• DTAC, now the only telco-backed accelerator in Thailand, continues the 4-month bootcamp DTAC Accelerate program to Batch 3 and has invested THB 20 million on their new co-working space Hangar for their graduates. The two program winners of this year are both in transportation sector — logistics marketplace GIZTIX and messenger services app Skootar.

Source: www.facebook.com/giztix

Source: www.skootar.com

Financial Institutions

In this year we see banks became more formally involved with the tech community, notably Kasikornbank and Krungsri as the early starters.

• Kasikornbank was the dedicated sponsor for the fintech category award in AIS The Startup competition where the winner was ChocoCard which provides simplified loyalty card & management solutions for SMEs.

• Krungsri started their own Krungsri Uni Startup program, targeting university students who are interested in technology and entrepreneurship.

• Siam Commercial Bank started its innovation initiatives by launching SCB Innovation Center with emphasis on digital and mobile banking.

Logistics

Thailand sees a big strategic investment from corporate in the logistics sector as DKSH, Asia’s largest market expansion services provider, bought 20% share in the full-service e-commerce solutions provider aCommerce. The partnership deal further emphasizes the importance of digital capability which almost every conventional business needs to secure to maintain competitive advantages. aCommerce recently raised a $5M bridge round this year in preparation for their upcoming Series B round.

Source: www.acommerce.asia

Technology

By the way, it’s also worth to mention again that Facebook and LINE have opened an office in Thailand this year. Around half of our country’s 67 million population are the users of these two social applications. Some interesting stats about the usage include:

• Thailand is Facebook’s most active country in Southeast Asia with 34 million monthly active users spending an average of 2.35 hours per day on Facebook. The number of postings is three times higher than the global Facebook average.
• Thailand current ranks as second largest market for LINE at 33 million users, only below their home base Japan.

Outlook

The tech ecosystem will continue to grow to despite the stagnant economy, with active support from both private and public sectors and consumers ready to learn and adopt new technologies. Dependency on incoming foreign funds and companies is still expected as Thailand awaits more local investors and a successful tech IPO story.

Note: All contents and opinions expressed in this story are humbly of my own and do not represent those of any of my current or previous employers.