Thailand’s startup media outlet Techsauce published two detailed reports this month; Investor Guide Q1 2017: Thailand Tech Startup Report and its annual Southeast Asia’s Top 75 Fintech Startups Report. What were the key takeaways to know about Thailand’s startup ecosystem and Southeast Asia’s tech investment landscape? We take a look at both reports:

How did Thailand startups do in terms of funding?

An introduction to Thailand

Total funding figure in Thailand is getting bigger – no less than $85.2 million as seen in the chart below. The exact number can’t be pinpointed as there were several undisclosed Series B investments.

Notable funding mentions: 

  • E-book platform Ookbee raised $19 million from Chinese giant Tencent to create a digital content ecosystem in Thailand
  • Fintech startup Omise raised $17.5 million led by Japanese firm SBI Investment
  • Ecommerce marketplace Orami (now Moxy) raised $15 million from Facebook’s Eduardo Saverin B Capital
  • 3 food tech deals were made in 2016. At the beginning of 2017, B2B food supplier platform Freshket has raised an undisclosed six digit funding round
  • Corporate Venture Capital was a trend in 2016 that saw numerous corporations shift focus to technology and innovation as both direct investors and limited partners. This trend is expected to continue well into 2017 with the emergence of property tech in Thailand, pioneered by real estate giant Sansiri

In the graph below, you can see that the number of funded startups has shot from 3 to 75 in only four years. The number of active angel investors and the number of VCs have also grown in tandem.

Data from the report also shows that ecommerce still remains the top category for investors and increased steadily on a year-to-year basis. The second category is logistics with funding raised by aCommerce, Giztix and more.

 

Only two months into 2017, and already eight startups have already raised funding this year.

The diversity of Thai startups attracting investors show that there is more room for verticals such as education tech (edtech) and travel tech.

The report also predicts that by Q2 2017, there should be more funding given to a variety of startups in different sectors and investment opportunities in Thailand’s ecommerce landscape.

Southeast Asia’s top fintech trends

  • While core technologies such as blockchain and AI have gotten a lot of publicity, startups that can realistically develop it or utilize it are still limited but extremely attractive to investors
  • Each country in this report is making moves to launch regulatory fintech sandboxes to test out financial technology framework – Indonesia, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam.
  • Many fintech firms in the region have mandates to work with banks and regulators, which means expanding beyond their domestic market may be a challenge
  • The entry of Alibaba’s financial arm, Ant Financial, into the region has caused startups that offer similar services to quickly adapt or risk getting squeezed out

Fintech players by country

The image above shows that Singapore is well ahead of other countries in terms of number of fintech companies with 31 players, followed by Thailand with 14 players. More doesn’t necessarily mean better, it will be time until one emerges.

With each country taking initiative to become less cash dependent, for example, Thailand government’s PromptPay initiative, this will be a continued trend into Q2 of 2017.

Insurance technology is still a minority but with Thailand’s Asia Insurance introducing online insurance packages and companies such as AXA and FWD offering online insurance in Singapore, the space is growing.

Financial technology in Southeast Asia is still growing and must in a region where only 27% of the population has a bank account. That leaves around 438 million people unbanked and endless opportunities for fintech firms to bridge the gap that traditional financial institutions are struggling to fill.

2017 is already shaping up to be another year of startup growth in Thailand but investors will be more strategic with their money. As fintech matures, it can only nurture the growth of online transactions.

The original reports from Techsauce can be found here and here.

Here’s what you should know today.

1. Singtel and Lazada collaborate to get Singaporean SMEs online

Local telco Singtel announced its partnership with Lazada. The two companies are launching an online marketplace called 99% SME, through which small businesses in Singapore can have an online presence and make their products readily available online.

The marketplace will be part of Lazada’s website, so users will be served ads about these small businesses and will be able to buy from them using Lazada’s infrastructure. The initiative is part of the 99% SME program by Singtel, Singaporean bank DBS, and media company Mediacorp.

Read the rest of the story here.

2. DHL ecommerce expands in Thailand-targets SMEs

DHL has extended its services to small ecommerce merchants, tapping into Thailand’s 2.7 million SMEs. This will mean greater convenience and a quicker delivery process, which means that merchants can focus more on growing and running their business, instead of spending more time on last-mile.

Read the rest of the story here.

 

3. Angel-eQ invests in Indonesian sport booking platform Doogether

Founded in 2016 by Fauzan Gani the platform enables users to book venues for 20 different kinds of sports, from badminton, basketball, to billiards and zumba in one platform.

Since its launch in 2015, Angel-eQ has invested in seven to eight startups.

Read the rest of the story here.

Here’s what you need to know today.

1. Carousell launches new app for buying-selling cars

Carousell Motors was born out of Carousell’s acquisition of Caarly, a startup that connects customers with used car dealerships. The Carousell Motors app sports more detailed product listings than Carousell, which usually features a product and seller name, a photo, and a price.

Carousell Motors was built by Caarly’s team, which transitioned into Carousell Motors.

The new app will let buyers search specifics like make and model, specific dealers, financing options, and car depreciation. Car seekers can also compare different car listings and use chat to get in touch with dealerships directly.

Read the rest of the story here.

 

2.  SK Planet and Samsung enter an ecommerce partnership in Southeast Asia

The MoU, signed in Singapore, aims to promote Samsung’s brand presence and provide increased convenience and access to the Korean company’s products in Southeast Asia through 11street Malaysia, 11street Thailand and Elevenia in Indonesia.

The Samsung Shop-in-Shop page enables consumers to search, browse and purchase Samsung products easily, as well as gain access to exclusive online-only products and presale offerings.

Read the rest of the story here.

 

3. Malaysia’s Delivereat secures funding from Gobi Partners to expand to new cities

The startup scored US$450,000 in pre-series A funding from the Gobi MAVCAP ASEAN SuperSeed Fund, Gobi’s collaboration with Malaysia Venture Capital Management Berhad.

With the funding, it plans to expand to other cities in Malaysia and increase its marketing efforts toward merchants to boost sales. Delivereat doesn’t offer a new business model, and still faces competition from Food Panda, recently sold to Delivery Hero. However, the funding derived from the team’s ability to execute.

Read the rest of the story here.

Here’s what you should know for today.

1. China’s SF Express is the most valuable company in the stock exchange 

Shares of SF Express Co, China’s largest express delivery company, soared by 10% daily limit for a third time in five trading days since its debut, making it the most valuable company in Shenzhen Stock Exchange.

One month earlier, Maanshan Dingtai Rare Earth & New Materials Co., Ltd. and SF Express completed an asset swap that valued S.F. Express at an estimated $6.8 billion. The combined company now has 4.18 billion shares, and is currently worth S$25.5 billion.

S.F. Express’ IPO comes at a time when Chinese courier companies were hit by a lack of delivery staff and negative news reports revealing that major courier companies are mistreating delivery personnel. Listed companies including YTO Express and STO Express saw their shares plummet as a result during the past few days.

Read the rest of the story here and here.

 

2. China prepares its own digital currency

After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central banks to issue digital money that can be used for anything from buying noodles to purchasing a car.

Chinese people are embracing the online currency-paying for cokes using the QR code on their phones, and even going as far as issuing online money transfers instead of handing out red envelopes during Chinese New Year.

The People’s Bank then, is adopting the attitude “if you can’t beat them, join them.”

Read the rest of the story here

 

3. Recommended Reading: Nasty Gal, once a fashion world darling, is now bankrupt. What went wrong?

By 2011, its annual sales hit $24 million, an 11,200% jump from three years earlier, the company said publicly. Sales leap-frogged again in 2012 to nearly $100 million.

But it wasn’t long before sales started dropping — to $85 million in 2014, and then $77 million in 2015, according to bankruptcy documents.

Analysts said that Nasty Gal’s rapid growth was fueled by heavy spending in advertising and marketing. It’s a strategy that many start-ups use, but one that only pays off in the long-run if one-time buyers become loyal shoppers.

Read the rest of the story here.

Welcome back to Monday-here’s what you need to know.

1. Alibaba makes its first entry into India-launches Paytm Mall

The new Paytm mall is an android application and is designed to replicate Alibaba’s ecommerce platform Tmall.

This comes at a time when India’s ecommerce market has become a two horse race between Amazon and Flipkart. Alibaba has already injected approximately $200 million into Paytm, valuing the company at around $1 billion and effectively making it a unicorn.

Alibaba would also be bringing sellers from Southeast Asia,  especially from Alibaba’s other investments such Lazada, and has set up 17 fulfillment centers for efficient service.

Read the rest of the story here.

 

2. Cross-border VC firm K2 Global has closed a $183M fund to bridge Singapore and Silicon Valley

K2 Global, a Venture Capital firm with its headquarters in Silicon Valley and Singapore, announced today it has closed a $183 million fund with the primary goal of “bridging Asia and Silicon Valley to create impact on a global scale.”

K2 Global also said it wants to work with “third-wave” startups — defined as companies that actively challenge incumbent players in major industries.

Read the rest of the story here.

 

3. Vietnamese tech startups could become target of private equity investors in 2017

“Service sectors such as health care, education and food and beverage are where we see the most attractive opportunities for private quitty in the short to medium term. Tech is the other sector to watch, with a vast number of startups attracting funding,” said Vinh Du Tran, partner at Ernst & Young Vietnam.

Vietnam’s attraction is in its rising economy, and an expanding middle class of 90 million people-more than 50% of the population are under 35 years old.

Read the rest of the story here.

 

4. Recommended Reading: J.C. Penney Is Latest Retailer Forced to Downsize

The 114-year-old chain, which had avoided mass closings despite years of losses, said it would shut as many as 140 of its roughly 1,000 stores by June.

Penney Chief Executive Marvin Ellison said the closings will allow Penney to adjust its business to “effectively compete against the growing threat of online retailers.” He said the remaining store base gives Penney an advantage since the locations can be used to ship or pick up online orders, minimizing delivery costs.

Key Takeaway

Read the rest of the story here.

January is generally a slow month for retail as people are tightening belts after splurging during the holiday season. End of year campaigns are also allocated large marketing spend to drive more traffic to Southeast Asia’s November 11/11 sales period and the 12/12 “Online Revolution” driven by Lazada, the region’s largest marketplace.

Looking at SimilarWeb web traffic – a sum of all (non unique) visits both on desktop and mobile –  for Indonesia’s most popular B2C marketplaces shows a decline of around 3 to 20% from December to January. Lazada Indonesia experienced a 3% drop in the number of monthly visitors.

But it was MatahariMall,  the country’s biggest department store chain, who noted the largest staggering drop of 62% in visitors to its online marketplace.

The two-year old online venture, MatahariMall.com, raised $100 million in October last year to bolster its share of Indonesia’s ecommerce market. A look at the company’s online traffic shows a buoyant performance in terms of its visitors – spikes in traffic from roughly 7M to 24M shows the difference in organic traffic and the effects of a marketing push.

A more stable performance this year might provide a better indication if it will manage to live up to its ambitions to become the “Alibaba of Indonesia”.

Two players that continuously capture a steady audience are Lazada and Blibli.com, a six year old e-marketplace owned by Djarum Group and BCA, one of the largest banks in Indonesia.

Not surprisingly, the best performing ecommerce sites are the best-funded, making it harder for smaller players to compete unless targeting a niche audience.

Meanwhile, most C2C marketplaces saw site visitors in January increase by 3 to 8%. Jualo, an online marketplace for secondhand goods, saw the biggest lift in web traffic with 8% growth.

Web traffic, of course, doesn’t automatically equate conversions, it’s only one metric in tracking an online company’s traction. The data, however, is useful for marketers, advertisers, merchants, etc. to understand which marketplaces can provide an opportunity to tap into a large pool of existing customers.

eIQ will be updating the numbers every month. Find out the statistics for Indonesia | Thailand | Malaysia | Vietnam | Philippines