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Source: Thailand Startup News  Oct 06, 2019

Google Report Indicates That 65% Of All Startup Funding In Asean Goes To Singapore

Google Report Indicates That 65% Of All Startup Funding In Asean Goes To Singapore
Source: Thailand Startup News  Oct 06, 2019
In the South-East Asian Startup scene, Thailand is seriously lagging behind Singapore, Indonesia and Vietnam. Countries like Malaysia and even Phillipines will overtake Thailand soon.

The internet economy of South East Asia is now reportedly worth about US$100 billion, and is set to triple to US$300 billion by 2025, according to an annual report on the region’s digital economy jointly published by Google, Temasek, and Bain & Company. The report was released late last week and provided insights into  the services and startups in the internet economy.

From the total market share, Singapore  controlled about US$12 billion of the market or  slightly over 10 per cent of the regional total. Google said that the overwhelming growth in SEA forced it to revise its previous prediction upwards by US$60 billion.

Google’s SEA managing director, Stephanie Davis commented to Thailand Startup News during a media briefing, “When we look at Southeast Asia, we really only see two speeds: fast and faster (growth).” Davis added that the region’s 180 million internet economy users had world’s highest mobile engagement rates, and a gross merchandise volume growth higher than even the US and China.

Capital funding into SEA continued at a “healthy pace” this year despite the slow global economy, with US$7.6 billion going to regional startups in the first half of 2019, the report said.

Of this sum, 70 per cent (or US$5.3 billion) went to startups based in Singapore whose businesses often serve the entire region, commented Temasek’s investment head, Rohit Sipahimalani. On average, about 65 per cent of all funds invested in SEA startups went to Singapore across the past three years.He added that Singapore had the best talent pool in SEA, resulting in a disproportionate number of startups choosing to establish themselves here. In particular, many countries lack engineering talent and even language skills like Thailand, Sipahimalani said.

There are currently 11 unicorns in the region, and a “growing cadre” of about 70 “aspiring unicorns”, whose valuation is tantalisingly close to US$1 billion, he added. Sipahimalani estimated that of these aspiring unicorns, most are from Singapore, followed by Indonesia and Vietnam.

They include Singapore-headquartered startups like Carousell,  ShopBack, Ninja Van,PropertyGuru, Zilingo, Carro, aCommerce, GoBear and One Championship.  Also on the list are Indonesia’s Halodoc and Akulaku, Vietnam’s Sendo and Tiki, and Malaysia’s iflix.

Sipahimalani said he expected the total funding for 2019 to beat 2018’s record-breaking amount of US$14.1 billion, and for the majority of those funds to go to e-commerce and ride hailing businesses.

E-commerce and ride hailing (including transportation and food delivery) are two industries in the report identified as the fastest growing this year. The e-commerce market, which the report said saw five million orders per day, was estimated to be worth US$38 billion. Meanwhile, ride-hailing was estimated to be worth US$12.7 billion, thanks to a growing number of dual-income, time-conscious middle class families seeking convenience. This industry was dominated by unicorns Grab and Go-Jek.

Singapore in particular saw demand for food delivery double from last year, sending the value of its ride-hailing market to US$3 billion, the report said, It added that Singaporeans’ high disposable income meant average order values were three or four times higher than other countries.

The report said. “Food delivery has undergone a fundamental shift in consumer behavior since 2018. From a niche service that was used only occasionally by a small group of users, it has become common for busy professionals and families alike to order food online for everyday meals and special occasions. By sparing consumers the inconveniences of humid weather and traffic jams, food delivery has become particularly popular in metro areas… the convenience of having piping hot food delivered to one’s doorstep is highly valued.”  The report said that a wide variety of food options, including affordable meals from hawker stalls, led to recurring usage of food delivery services.

E-payments (US$600 billion) and online travel bookings (US$34.4 billion), which was mainly driven by bookings of budget hotels, were the other rapidly-growing internet industries identified in the report.

Editors note: Just like my initial rantings, this report verifies that the Thailand Startup Scene is simply not growing as fast as our neighbours. Despite the fact we have so many government agencies handling startups and innovations and huge amount of budgets allocated to these agencies, all their events and initiatives are simply full of hot air. Thailand can forget about a Unicorn, so far the amount of real Thai startups that have actually secured just Stage A funding can be counted on one hand with still fingers available!

We have been saying so many times, lack of English skills, lack of marketing, private and government entities full of ego, too much red tape and bureaucracy at government agencies, nepotism and cronyism and private entities being greedy, are all the cause of this.

Thailand has lots of young and talented innovators and tech specialists, but many lack the proper nurturing and also the lack the funding.

We at Thailand Medical News feel that more efforts should be done to develop the local  startup industry  at even faster pace with more funding support from the government.