Age of tech startups is here
With venture capitalists, technologists, entrepreneurs joining hands, potential is high.
When you talk about “venture capital” and “tech startup” in Thailand, it might seem like a tale from Silicon Valley. The truth is, it is now becoming a reality and starting to flourish again in the region throughout Asia, including Thailand.
Venture capital and tech startups had been popular in Thailand more than 10 years ago when the dot-com business was booming. However, as the dot-com boom went bust, so did the venture-capital boom.
However, things are changing again. Asia is becoming a hot place for grooming startups in the technology industry.
Jay Jootar, founder and chief executive officer of The Venture Catalyst (VC) Group, said at the first tech startup conference in Bangkok “Start it Up, Power it Up”, hosted by the leading tech blog “Thumbsup”‘ and Spring News that now is the right time for tech startups in Thailand as the key components of a good environment to groom tech startups were there – technologists, entrepreneurs, and investors.
The conference was held last weekend at the Hubba, the co-working space office.
“In Thailand, there are a lot of talented technologists, but tech entrepreneurs and tech investors are rare. We play a role as both tech entrepreneur and tech investor to catalyse tech startups in Thailand,” said Jay.
The VC Group, which has been a tech investor and tech entrepreneur for three years, now partners Foxconn – the world’s largest electronic manufacturer and the manufacturer of Apple’s iPod, iPhone, and iPad, and Amazon’s kindle – in a joint venture with a new tech startup in Thailand called The Power All Venture.
He said that currently The VC Group has invested in four tech startup companies. The first and flagship one is The Power All Venture that has just started to develop cloud computing and the smart TV system. The company is partnered by Foxconn’s subsidiary firm.
“It is our partner and our customer at the same time. We develop the platform over which we have joint ownership for Foxconn, and we can utilise this platform for other tech startups who are interested in and become our partners,” said Jay.
The other three tech startup firms are developing technologies like telecom system and enterprise software. By the end of this year, it aims to launch two of them, including companies who develop smart TV and telecom systems, in the global markets according to its partners’ business bases, including Asean, greater China, and the United States.
He said the company usually partners foreign investors to jointly invest in tech startup companies. The partners have to have the potential to be the tech startup companies’ customers as well.
“The total value of investments of the VC Group is about Bt30 million to Bt40 million, which is investment from the VC Group and its four foreign partners that have invested in four tech startup companies,” said Jay.
The focus, he added, is to make these four tech startup companies to be strong and sustainable with the potential to enter the global market rather than focusing on increasing the number of tech startup companies to invest in.
After working for seven years with True Corporation, Jay has the experience of startups and grooming businesses related to technology. He said that in the global market, there is a suitable environment for grooming tech startups. There are tech investors, tech entrepreneurs, and tech startups working together. But in Thailand, tech investors and tech entrepreneurs are rare. However, he believes Thai technologists have the potential to start up and scale up their business. Hence, he resigned from True Corp to set up The VC Group to catalyse tech startups in Thailand.
Meanwhile another fund, SPC Capital – venture capital in renewable energy – is now eyeing to expand its funding to invest in tech startups as well. Kanadej Thamanoonragsa, SPC Capital’s fund manager, said the big challenge for Thai tech startups is the source of funding.
“In the past, they had two choices of funding – their own money and bank loan – and that has been the main obstacle for tech startups to scale up their business to be a success with focus on development rather than seeking funding. We are different from banks. We do not only fund but we work as the tech startup’s partner, advising them, assisting them in running the business, and incubating them,” said Kanadej.
He added that normally tech startups had only tech skill but lacked business and management skills, which venture capitalists could provide.
“Tech startups themselves have to adjust their attitude about the ownership in the business of venture capital. They should have the attitude that venture capital is not just an investor giving [and taking] the money, but they are their strategic partner who can groom them up,” said Kanadej.
Patai Padungtin, principal evangelist of Builk Asia, a Thai tech startup who is now successful in welcoming investment from foreign venture capitalists and in expanding its business to the regional market, said that the first key for the success of a tech startup is to think globally and think regionally rather than only thinking of the domestic market. Then, they have to concentrate on developing their business with their core competency rather than focusing on looking for venture capital.
“Once, their business can be run without loss in revenue and once their business needs to be scaled up, venture capital is the right solution. The right venture capital will give us the vision and advice that helps us to scale up the business successfully and sustainably,” said Patai.
He added that his own passion is to have a Thai business that can be scaled to the global market. Now, he has found the right business model for Builk Asia in the regional and global market. Builk Asia is service provider offering applications for the construction industry for free through software-as-a-service model. The revenue comes from advertisement.
Meanwhile, Gabriel Yang, media and event manger of e27, a five-year-old media organisation focused on the Asian technology startup industry that also organises the “Echelon” – the largest technology startup conference in Asia – said that there is a lot of interest with regard to the Thai startup community. The Thai tech startup community is growing when compared to a year ago. Now, there is a lot of vibrance. For example, Thumbsup hosted this kind of networking event for the Thai tech startup community. There is also a lot of interest from venture capitalists from this region as well. The market is developing very well.
“We have a lot of interest in helping Thai startups grow that are based in Thailand and to grow around the region as well,” said Yang.
Thailand is definitely on e27’s radar and might be a place for hosting Echelon’s satellite events by next year.
e27 is a media startup, started up in Singapore from a blog. Now the company runs a blog and the event for the tech startup ecosystem for Southeast Asia called Echelon, which started in 2009 with Singapore as focus. Currently, it has expanded to the region. More than 3,000 people attended Echelon 2012 and its six satellite events around Asia – Singapore, Malaysia, Hong Kong, Indonesia, Japan, and Taiwan.
“We have plans to may be create and operate the Echelon concept and events in another part of Asia as well,” said Yang.
“We are now slowly moving into online form of revenue like ad and Web-based programs, which will be launched within this year,” said Yang.
Currently, e27 has a strategic partnership with Thumbsup to support the tech startup community in Asia.”We build the event as the platform of networking, therefore tech startups have to utilise this platform for their business themselves,” said Yang.