While Thai Startups Struggle To Get Fundings, SCB Bank Backs Indonesian Unicorn Startup Go-Jek
Indonesian Unicorn, Go-Jek that is valued at more than US$ 10 billion recently had Siam Commercial Bank(SCB) as a major investor in its Series F Funding round. (late-stage financing). The amount of the investment was not disclosed but is rumored to be substantial.
Indonesian Go-Jek Benefiting Form Thailand's SCB Bank's investments
Go-Jek, which debuted its app for hailing motorbike taxis in Jakarta in 2015, expanded beyond Indonesia to cater to consumers across Southeast Asia, aiming to popularise an all-purpose "super app" similar to Tencent's WeChat in China. Go-Jek hosts more than 20 on-demand services on its platform, from food delivery to cab hailing.
Thailand's ride-hailing business accounts for 20% of the Asean market, and key players to date
include the large companies like Line and Grab, and with Go-Jek entering the market, it is indicates that competition in super apps have arrived in Thailand.
SCB bank is counting on growth of Go-Jek to boost its revenue and also the expansion of its own online financial services in tandem with Go-Jek’s platform.
SCB is not the only Thai bank to jump on the trend of supporting ride-hailing services while expanding into the lucrative digital banking sector. Kasikorn bank made a large investment in Singapore based Grab with a US$50 million deal in November 2018. There are rumours that Lineman from Korea is planning a funding round sometime this year and that at least 2 Thai banks and 2 huge Thai conglomerates are preparing to participate.
While Thailand has to date not produced a single Unicorn startup or even a high value startup so far despite a lot of noise and “hot air” by agencies and also corporate companies and Thai accelerators, many local startups are complaining about the lack of funding available for all stages of start-ups in Thailand even for pre-seed and seed stages. This despite the fact that many Thai Agencies and Corporations have announced various Funds being set up to cater to the local startup industry.
A local thai startup entrepreneur who wished to remain anonymous commented” The local Thai start-up scene is full of hot air and mere talk. At some events where agencies claim that there are lots of VCs around for startups to meet and explore, we find maybe 1 or 2 such VCs present and most do not get a chance to present to talk to them as there is a lot of nepotism and favoritism in place by the organizers. Then there is a lot of so called VCs and also Accelerators that are not prescreened at some events and most instead will ask for huge fees to “coach and groom” the start up for future fundings while they themselves cannot guarantee confirmed fundings. To make matters worst, in some cases we have seen startups with not a proper business model winning awards and lots of ‘stupid media’ writing about them without even doing any due diligence or analyzing their business model and in some cases these startups might receive pathetic cash funds like a mere Bt 20,000 to Bt 100,000! to be paraded in the public to show that these corporations or agencies have done their role in supporting startups! Unless you are some relative or nephew of some Thai conglomerate , you can forget about getting any form of support in Thailand.”
Another health related startup owner commented, “In some of these Thai corporate hubs and accelerators, they demand so much equity from you in return for pathetic seed capital that its better to just pack up for another country like Singapore, US or Australia to try to seek help.”
But many generally agree that with various factors in play, the reality is that fundings in the Thai startup sector is actually becoming more scarce despite the numerous news headlines and talks at events about new funds being set up and available.
Thailand Startup News will be doing a series of articles in the coming weeks on deep analysis of the startup market in Thailand including analyzing and probing past efforts by agencies concerned and also corporate initiatives and also the various so called “successful Thai startups” business models, the fundings that they have received and their current situations , real business viability etc. Especially in lieu of the recent fall of the startup Honestbee, where many of its Thai executives in the past were hailed as “super startup heroes” etc in various events etc, it would be interesting to see the reality of things.