Posts

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 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.

Here’s what you need to know today.

1. Amazon source reveals Southeast Asia strategy

What markets are Amazon targeting? The source said Singapore will serve as the company’s launching pad to sell food throughout Australia and Southeast Asia, while another hub in Vietnam will eventually allow Amazon to sell into other Southeast Asian countries and parts of China. The Philippines, Thailand, Malaysia and Indonesia are viewed as target markets.

Going local Amazon will try to source locally as much as possible to cut costs, but if it does have to ship it in, they’ll ship it from Singapore. They’ll start putting a lot of inventory in Singapore, which means that an Australian customer will most likely get their product from Singapore, not the US.

Read the rest of the story here.

 

2. Alibaba goes Down Under to help businesses go global

Alibaba Group has launched its latest overseas headquarters in Melbourne this past weekend. The new office will support 1,300 Australian and 400 New Zealand businesses selling on Tmall and Tmall Global.

What else is Alibaba planning to do in Australia? The giant plans on building the entire operating infrastructure for regional businesses to expand globally, which includes cloud computing, online payments and logistics.

Not to mention Ma also signed a memorandum of understanding with Australia Post to bring the state-run logistics firm to Southeast Asia’s ecommerce market via Alibaba-owned Lazada Group.

Read the rest of the story here

 

3. Singaporean startup Yojee uses AI and blockchain to help logistics businesses

Yojee has built software that uses AI and the blockchain to help logistics businesses coordinate their fleets and make the most out of existing last-mile delivery infrastructure.

The system is powered by machine learning and automatically assigns delivery jobs to drivers, reducing the need for a human dispatcher. This lowers costs for logistics providers and makes deliveries faster for customers. It also uses blockchain technology to track transactions and deliveries so that they can always be verified.

Tackling the last mile problem: “A recurring message from founders and CEOs was that selling is getting easier because the market is growing, but delivery is still very difficult,” said co-founder and CEO, Ed Clarke.

Read the rest of the story here.

 

Wrapping up for the day? Kick back and enjoy today’s latest ecommerce headlines.

 

1. Tencent doubles down on Southeast Asia

Tencent, maker of WeChat and China’s most valuable tech company, is doubling down on its push into Thailand and the Southeast Asian region.

The Chinese giant has formed a joint venture with Ookbee, the firms announced today, investing US$19 million to turn the venture into a “content ecosystem” for digital media. Prior to this, Tencent also announced that it was investing in Thailand’s Sanook Online, a contents portal.

It seems that Thailand will be the place for Chinese giants to flex their power muscles.

Read the rest of the story here.

 

2. China’s BitSE’s blockchain technology used in fashion to fight counterfeits

In the same way that bitcoin’s blockchain is an immutable ledger of peer-to-peer transactions, VeChain creates a record and digital trace of physical items. Each item is given a unique ID, which is paired with either a NFC chip or a QR code, depending on the client’s requirements. That binds the item’s digital identity to real-world transactions.

Read the rest of the story here.

 

3. Vietnam retail ecommerce to reach $10 billion by 2020

Nguyen Thanh Hung, chairman of Vietnam E-commerce Association (VECOM), agreed that the development of mobile phones and applications had contributed to promoting purchasing activities.

Hung said the country’s e-commerce had been developing at a growth rate of 30% a year. “Businesses have quickly shifted from offline to online retail. Several are even totally doing business online,” he said.

Read the rest of the story here.

Here are the key ecommerce headlines you need to know.

1. Indonesia to set up crowdfunding platform for ecommerce startups 

Indonesia’s ministry of cooperatives and SMEs has announced plans to set up a crowdfunding platform to fund startups as part of its broader e-commerce roadmap introduced earlier this month. The government will join hands with the University of Indonesia (UI) to build the site.

Read the rest of the story here
 

2. Dentsu Aegis Network acquires ecommerce solution firm Bluecom

 Dentsu Aegis Network (DAN) announced the acquisition of Bluecom Group. The firm will become part of DAN’s digital arm Isobar China Group and will be rebranded as “Isobar Commerce”, in a bid to strengthen the network’s position.
Read the rest of the story here

 

3. Thailand’s Kasikorn Bank joins with IBM for blockchain

Kasikornbank will be the first Thai bank to apply the blockchain technology and aims to start the services in the first half of 2017, Somkid Jiranuntarat, vice chairman of Kasikornbank’s technology group, told reporters.

Blockchain is a web-based transaction-processing and settlement system whose efficiency banks say could slash costs. It creates a “golden record” of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification.

Read the rest of the story here

Ready for the weekend? Check out today’s top ecommerce headlines first.

1. Tmall is turning black Friday into a Chinese phenomenon 

Chinese consumers will get some of the same bargains that Americans do after Thanksgiving, from the same retailers with just a few taps on their mobile phones.

Tmall Global, Alibaba Group’s cross-border e-commerce platform, for the first time has partnered with several U.S. brands including Macy’s, Costco and Target to launch the “Same Products, Same Time, Same Price, Same Black Friday” campaign. Starting with a pre-sale that launched on Monday and lasting through this coming Sunday.

Read the rest of the story here

 

2. Lazada CEO: Southeast Asian startups need core strategies to survive

Entrepreneurs need to know their core strengths and “it has to be something that only they can be good at,” said Maximilian Bittner, CEO of ecommerce firm Lazada.

But succeeding in building up core strengths might not be enough to stay relevant, especially with new and disruptive businesses constantly popping up.In the past, companies would have to invent something, whereas today, successful companies are those who meet a need at just the right time. Lazada’s Bittner shared that disruption in the competitive ecommerce space is something he has concerns about.

Read the rest of the story here

 

3. Walmart tackles food safety through block-chain trial

Like most merchants, the world’s largest retailer struggles to identify and remove food that’s been recalled. When a customer becomes ill, it can take days to identify the product, shipment and vendor. With the blockchain, Wal-Mart will be able to obtain crucial data from a single receipt, including suppliers, details on how and where food was grown and who inspected it.

Read the rest of the story here.