Starting a business with Angel Investors in Thailand

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Thailand, and its capital city Bangkok, has long been a business hub for Business Angels. Both domestic and international businesses have thrived in the region over the past decade, making it the second largest economy in South East Asia.

Part of the appeal for businesses is Thailand’s low cost of living. Good quality commercial properties are available at reasonable prices and the country’s current business regulations encourage entrepreneurship. A strong work ethic and an increasingly educated population further strengthen the case for doing business in Thailand.

The prospect of starting a project or investing in Thailand is therefore appealing to many people, both local and foreign. Yet, unless you are already well established in the country, securing finance for a startup can be difficult. Most banks are reluctant to lend unless a property or pre-established business can be placed down as collateral.

A history of entrepreneurship does exist within Thailand, but this often based around the tight-knit family structure. Small family businesses are the most common source of employment and investment is usually inward with capital shared between friends and family.

So without a foot in the door, how can an outsider seek to penetrate the potentially golden Thai marketplace? One way is to seek assistance from an ‘Angel Investor’ or ‘Venture Capitalist’.

Foreign Angel Investors Operating in Thailand

In the past, such investment has come from other South East Asian nations, namely; Singapore, Hong Kong or Japan and their investments have been focussed around the tech industry. Using techniques and expertise adopted from their own nation’s successes, these investments usually return a profit. Here we look at the best South East Asian Angel Investors operating in Thailand.

Japan

Cyber Agent Ventures

The Japanese Investor firm Cyber Agent Ventures, is a Venture Capitalist firm investing in Internet start-ups. They claim to have capital upwards of 100,000,000 Yen (around 34.5 million baht) and have eight offices located around Asia. Their CEO Soichi Tajima describes them as “a venture capital company that specializes in Internet businesses.” Beyond just investing, they claim to “aggressively help maximize the value of outstanding and emerging Internet services.” Despite being based in Japan, Cyber Agent Ventures would certainly be a valuable partner for anyone starting an online business in Thailand.

Singapore

DMP

Another option if you are looking for investment to come from outside of Thailand, would be Singaporean based DMP Investments. Operating across South Asia, these Venture Capitalists have gained a strong reputation in the region.

A brief summary on the DMP website states “We are a venture capital firm focused on emerging markets that have recently joined the global digital transformation process. Specifically, we look at the development of the consumer internet and its supporting infrastructure.” With successful investments such as 2C2P, Grain, Medical Departures and Coda Pay to their name, DMP is the best choice for particularly unique ideas.

Set return and/or equity are negotiated with the company upon contact.

Expara

A second choice from Singapore Angel Investors would be Expara. Established in 2000. In their words “Expara provides both investment and services to the enterprise ecosystem.” This Business Angel Investor is favourable as its focus is less narrow than some of its competitors. Their investments are much more diverse. Furthermore, Expara is one of the few venture capitalist firms that also offer training and mentoring to its customers.

A final positive for those based in Thailand is that Expara has an office in Bangkok, whilst their CEO is a Visiting Professor in Entrepreneurship for the Sasin Graduate Institute of Business Administration at Chulalongkorn University in Bangkok. Suggesting a strong knowledge of the local economy.

EEUU

Startup Angels

The widely renowned, American based venture capitalist group Angel Investors have also recently ventured into Bangkok. They hope to “bring investors to new markets, across the US and around the globe” and are an excellent source for connecting would-be investors with new start-ups.

Thai Angel Investors and Venture Capitalists

If you are Thai and want to work with a compatriot, or if you would like an investor with more intimate knowledge of the local economy, there are an emerging group of successful Thai Angel Investment groups. Here we look at the best and analyze which would be best suited to particular markets.

Alpha Founders

Alpha Founders is a Thai Investment company using European funds to “address major local problems”. Based on the Rama 4 road in central Bangkok, their projects focus on mid-stage projects run by local entrepreneurs. Examples of their previous successes include; Rabbit Internet, ITM Technologies and the ecommerce Lazada.

Alpha Founders have also recently moved into Indonesia and early indications are that they plan to take some of their Thai companies over to the archipelago. Any business with global aspirations that is looking for an Angel Investor could certainly benefit from Alpha Founders’ aspirations.

Set return and/or equity are negotiated with the company upon contact.

The VC Group

The VC Group website mission states their aims as “to build products that make work and life more fulfilling and productive.” They aim to do this across four domains (TECH); technology, education, content and health.

Skills the VC Group specialize in include:

  • Embedded Systems
  • Cloud Computing Programmes
  • Application Development
  • Real Time Data Processing
  • Multimedia Streaming

A good example of these skills and arguably The VC Group’s most successful venture is Penta; a mother company encompassing a wide range of sub groups such as Penta TV, a Wi-Fi set-top box that consolidates live broadcast TV channels, online streaming content, and multimedia file playback into one single easy-to-use platform. Penta S (a.k.a. Penta Cloud Client) is a general-purpose platform that combines the capabilities of Android with the services of GNU/Linux into one single device.

The VC Group is based in Bangkok, Thailand and has offices along the city’s Skytrain route; between BTS Wongwian Yai and BTS Krun Thon Buri.

Investment return rates can be negotiated by emailing: contact@thevcgroup.com.

Ardent Capital / Wavemaker Partners

For those working in e-commerce the newly formed Ardent Capital / Wavemaker partnership is a great potential investor.

After a successful five years in which Ardent Capital generated over 3500 jobs in Southeast Asia, and built a portfolio of ecommerce companies worth over US$350M, in July 2016, the company merged its Venture fund into Wavemaker Partners.

Early indications are that this will not affect the successes of the company. Past successes such as HappyFresh (leading regional grocery delivery business), Snapcart (targeted shopper intelligence app), Goxip (fashion discovery platform and Floship (international fulfillment and logistics) are all continuing to operate viably.

For more information on Ardent Capitalists or if you are thinking about working with them, their website holds a fantastic catalogue of past presentations to help you gauge the company’s capabilities and their terms for investing.

MAP2 Ventures

Founded by University of Montreal graduate, Mario Hardy, MAP2 is one of the smaller Angel Investment groups on our list.

The company’s reputation lies with its founder, who describes himself as “a man of action and execution.” As they tend to invest in smaller projects than their competitors, MAP2 Ventures is good in that as well as providing seed capital, it also provides management advice, mentorship and access to a vast network built over a lifetime experience in corporate development.

MAP2 Ventures should be a prime choice for anyone seeking a more hands-on, personal relationship with their investor.

InVent by InTouch

InTouch are a well-established Thai firm operating in asset management, telecoms, media, IT and digital content. In 2012, they set up InTouch, a corporate venture capital project.

Now, InTouch is one of the largest Venture Capitalist firms in the country. Their annual fund size is upwards of seven million dollars and their minimum investment is $150,000, so they are only for serious, large-scale projects.

In order to receive funding, potential companies must pass a six-step process.
1. Screening
2. Due diligence
3. Term Sheet
4. Final due diligence
5. Agreement
6. Closing

The lengthy application process is worthwhile however. With access to over 40 million mobile subscribers in Thailand alone, a global network of companies and investors, plus many successful long-term partnerships they are undoubtedly one of the strongest players in the market.

Is using an Angel Investor a good idea in Thailand?

A 2012 study by William Scheela, Professor of Business Administration at Bemidji State University, Minnesota, USA, analyzed a sample group of 20 Thai Angel Investors. Its conclusion viewed their input as “active long-term investors as shown by significant time spent monitoring their investee companies, taking a board seat in most deals and aggressively removing top managers when warranted.”Such a description clearly indicates the potential seen already in the emerging marketplace.

Even as recently as May 2016, Thailand has had reason for optimism in its enterprising economy, as the Thai Government launched the ‘Startup Thailand 2016’ fair at the National Convention Centre in Bangkok.

Opened by General Prayut Chanocha, the event marks the start of a new government led incentive to create 10,000 start-ups in the country by 2018. This will be done using a new THB 20 billion ($574 million) government venture fund.

Ideas already attributed to this scheme include:

  • ABorrow an app that compares loan rates from across the web and high street.
  • Skootar, a messenger service aiming to cut through Bangkok’s traffic problems by charging full price for one-way trips, but half price for any item the messenger picks up early.
  • Drivebot, a downloadable app that delivers virtual maintenance reports of your car to your phone. It checks everything from the battery life to the levels of oil in the engine.
  • Santabox. Finally, this app asks people to fill in a questionnaire on consumer satisfaction. Samples are delivered to target groups allowing businesses to change their products to match their customer’s needs. Some of their surveys have been completed over 10,000 times.

It may be that success stories like that of Agoda have encouraged new waves of Angel Investors to come to Thailand, and, with their help, there are clear signs of progress in Thai enterprising.  The number of start-ups in Thailand is expected to increase even further over the next three years and angel investors will remain a prominent factor in their successes.

Andy Aditya

Andy Aditya

For the last 25 years, as a Startup specialist, Andy has started and built up over 20 companies in Thailand, under 15 diversified industries. He assists international companies to establish and grow their business in Thailand/Asia through their own branch setup or representations.

He has been an accomplished executive with a high-caliber in general management skills gained through hands-on experience in core business functions like strategic planning & operations, sales & marketing, international business & sourcing, product development & branding and financial & employee management.

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