Malaysia’s connected roadside assistance solution provider, Bateriku, has raised US$7.4 million (RM34.7 million) in its Series B funding round from KWAP, Gobi Partners, SBI Capital, and VentureTECH.
The Selangor-based firm will use the money to expand across Malaysia as well as Southeast Asia, with Indonesia and Singapore in the first phase.
“This investment will fuel our mission to transform roadside assistance and reshape the automotive ecosystem,” said CEO Azarol Faizi.
Established in March 2014, Bateriku.com began as an on-demand car battery replacement service. The startup has now evolved into an ecosystem that connects car users with roadside assistance, trusted workshops, an auto parts marketplace, and ancillary services.
Bateriku.com’s extensive network includes nearly 200 Pitstop outlets across Malaysia and its first international outpost in South Jakarta, Indonesia. Its ecosystem comprises over 1,000 trained gig technicians (BHero), 78 entrepreneurs (BPreneur), and close to 3,000 workshop and auto part partners (BBuddy), all coordinated through a 24x7x365 contact centre that connects customers to the nearest service providers.
The firm employs 382 people and has built its ecosystem by training nearly 1,000 gig mobile technicians (BHeroes), developing 78 entrepreneurs (BPreneurs), and onboarding approximately 2,000 car workshops (BBuddies).
Bateriku provides centralised training to internal and external parties through Akademi Bateriku – a training institution endorsed by the Department of Skills Malaysia (JPK) and the National Dual Training System (SLDN) under the Ministry of Human Resources of Malaysia.
In 2022, the company launched Akademi Bateriku to provide reskilling and up-skilling programmes for automotive professionals within its ecosystem. To date, nearly 2,000 Malaysians have benefitted from this.
While the battery business remains at the heart of Bateriku.com’s operations, environmental sustainability is a core priority, says the company. Its’ Go Recon Save The World’ initiative focuses on reconditioning and recycling batteries, ensuring they are reused, repaired, or responsibly recycled. This initiative supports Bateriku.com’s nationwide warranty and after-sales programmes, with non-reconditionable batteries processed by licensed smelters approved by the Department of Environment (DOE).
“To give some perspective, approximately 500,000 car batteries are being replaced every month in Malaysia, which indicates roughly 10,000 tonnes of used batteries are being disposed of each month. Bateriku.com collects slightly less than 1,000 used car batteries every month from our customers across the nation. It’s our responsibility and in our best interest that our customers are educated on the impact of properly used battery disposal on the environment, particularly through our ‘Go Recon Save The World’ initiative,” Faizi added.
Southeast Asian angel investor club AngelCentral today announced its third annual Angel Investor Behavioural Survey Report for 2024, revealing that 80.6 per cent of surveyed angel investors in the region express optimism about the startup ecosystem over the next five to 10 years.
The report also stated that twice as many angels reported gains on their overall portfolios compared to those who have experienced losses.
Additionally, over 36 per cent of angel investors are new to the scene and have opportunistically started their activities in the last two years, demonstrating a continued influx of interest even amid a challenging funding environment.
The report revealed that many angel investors have adapted to the market’s volatility and valuation shifts by implementing various risk mitigation strategies.
Seventy-four per cent reported overall portfolio diversification beyond startups, with most investing less than 10 per cent of their assets in this space. Furthermore, 61.1 per cent are leveraging syndicates to enhance peer learning and validate investment opportunities, while 26.4 per cent have reduced their ticket sizes for each angel investment.
“I am pleasantly surprised and happy with the maturity of our angel investors. Rather than making knee-jerk reactions
to the market’s gyrations, ASEAN angels have remained focused on the long-term growth story of the startup space and are also actively mitigating their risks,” shared Huang Shao-Ning, Chief Angel at AngelCentral.
“We see similar trends within our club, where most of our member angels now prefer to invest with smaller ticket sizes and via syndicates. Although our total club funding this year remains the same as in 2023, we are witnessing a record influx of new angels joining our club in the past six months.”
The report stated that when evaluating startups for investment, angel investors prioritise potential business opportunities and the strength of the founding team. They also consider founders’ ethical beliefs a common deciding factor.
Interestingly, 30.6 per cent of respondents are new to angel investing with less than two years of experience. The profile of the angel investors remains unchanged, with more than 80 per cent being men in their 40s to 50s who work in a corporate role or who are business owners.
This year’s survey gathers insights from over 70 Southeast Asian angel investors regarding their angel investments. The survey aims to understand the evolving perspectives and strategies of angel investors and provide valuable insights into their investment approach, evaluation processes, returns, and overall mindset.
The survey defines angel investors as individuals who invest personal money, time, and networks into early-stage companies that are typically in the initial 12-36 months of their operations.
The investment can be made directly (the angel becomes a direct shareholder of the investee company) or indirectly (the investment is syndicated via a special purpose vehicle or informally via another person’s name).
How do you convince lawyers to embrace digital transformation by using AI in their practices? Lawdify may have the answer.
The company offers AI-driven SaaS solutions tailored specifically for legal professionals. It creates AI agents designed to manage specialised, labour-intensive, and high-stakes tasks in the legal field.
These AI tools intend to significantly reduce the manual effort required for tasks such as document tracking, review, and analysis, thereby addressing a critical pain point that has long plagued the legal profession.
Lawdify CEO and Founder Eliza Jiang, who has over a decade of experience in private legal practice, identifies the inefficiencies in traditional legal workflows. Before entering law, she worked in accounting, where tools like spreadsheets were essential for distilling large volumes of data into actionable insights. However, upon transitioning to law, she found no comparable tools to assist in analysing and synthesising textual data.
This realisation drove her to create a solution that could automate the tedious and time-consuming process of organising case documents into actionable summaries.
“When we started designing, I knew I wanted the tool to be one I wished I had throughout my 10 years of practice. We are confident that the tool will become indispensable to lawyers worldwide,” she explains.
“With this in mind, I leveraged my expertise in legal workflows (i.e. the way lawyers review documents, summarise data, put together their legal claims, and draft their pleadings) to create a product that can be easily entrenched in these workflows. We then outlined the user journey to distil, analyse, and summarise data from documents in various tables. Involving the engineering team at every step of the process, we wireframed the different front-end and back-end requirements to align with this user journey to deliver the results the users need.”
Lawdify is making significant strides in the legal tech industry, focusing on high-profile and reputable dispute teams across major legal hubs such as Singapore, Hong Kong, London, and Toronto.
The company’s AI-driven tool is jurisdiction-agnostic, making it versatile and applicable across legal systems.
Initially targeting boutique law firms with a dispute practice, Lawdify plans to expand its reach to corporate practice groups in Q4 2024 following the commercial launch of its product.
Tackling barriers to entry
During a panel session at the UNCITRAL Academy Conference 2024, Jiang addresses the concerns surrounding the integration of AI in the legal industry.
Built on enterprise-grade versions of large language models, Lawdify’s applications prioritise data security by storing information in isolated instances on major enterprise cloud services such as Google Cloud Platform, Microsoft Azure, and Amazon Cloud Services. This approach guarantees that client data remains secure while providing powerful AI tools tailored for legal professionals.
When asked about the possible barriers of entry for lawyers to use its product, Jiang reveals that apart from trust and data privacy, there are other issues, such as tech products not considering lawyers’ input in their development process and lawyers’ hesitancy to adopt new technology that is deemed too complex.
“That is why when we design our platform, we ensure that Lawdify is built with an intuitive user interface to easily set up summary tables in which content can be generated in seconds. This function is not entirely new, as summarising data in tables is something that lawyers already do with Word and Excel. Lawdify simplifies this process,” Jiang says.
Lawdify operates on a SaaS subscription model, offering its AI-powered tools with a generation limit tailored to the needs of legal professionals.
The company has successfully raised external funding to support its growth and development.
In 2024, its primary focus is on the commercial launch of its product worldwide, scheduled for Q4, marking a significant milestone in its expansion strategy.
Not too long ago, chatbots were like overenthusiastic customer service agents with a one-track mind: they followed a fixed set of rules and didn’t handle small talk very well. Ask them anything outside their rigid script, and you’d be met with confusion — or worse, repeated display of the menu options. Fast forward to today, and chatbots have gone through a renaissance, evolving into highly sophisticated AI agents powered by large language models (LLMs).
These chatbots are no longer just answering questions; they’re holding conversations, understanding context, and delivering responses that feel more human than machine. It’s not just about resolving customer queries anymore — it’s about shaping the future of customer experience, one intelligent conversation at a time.
From rule-followers to game-changers
Remember when chatbots would only respond based on a predefined script? These rule-based bots were the pioneers of automated customer service, helping businesses answer basic inquiries at scale. While they were a significant step forward, they had one major flaw — they were only as smart as their programming. Step out of line with your questions, and you’ll be quickly reminded that you are talking to a robot.
But now, chatbots have had their “glow-up.” Thanks to advancements in AI, particularly in large language models like GPT-4, chatbots are moving beyond simple “if this, then that” frameworks. Today’s AI agents are conversational dynamos, learning and adapting as they go. They understand context, emotion, and even intent. It’s as if chatbots have been to charm school — except their training comes from massive datasets and cutting-edge algorithms.
For example, consider LLM-powered models like ChatGPT or Google’s Bard. These models can handle anything from running research to provide complex technical support, all while maintaining a conversational tone that feels natural. The shift from rule-based systems to AI-powered agents has enabled businesses to provide a level of personalisation that was once thought impossible. It’s a whole new chapter in customer engagement, where chatbots can empathise, problem-solve, and even crack a joke or two.
The rise of AI chatbots isn’t just a passing trend; it’s revolutionising industries across the board. According to a report by Juniper Research, the global operational cost savings from using chatbots has reached $11 billion in 2023. That’s not just a drop in the bucket — that’s a tidal wave of savings, driven by these sophisticated AI models.
But the impact of AI chatbots goes far beyond the bottom line. Studies show that companies using chatbots see a 30 per cent increase in customer satisfaction rates. With their ability to provide quick, personalised responses, chatbots keep customers engaged and happy, improving retention rates significantly. After all, a customer who feels heard is a customer who comes back.
Real conversations, real impact
What’s behind this evolution? Large language models like GPT-4 and its counterparts have fundamentally changed the chatbot game. These models are trained on vast amounts of text, and data, enabling them to predict and generate human-like responses. This predictive ability allows chatbots to understand not just what a user is asking but why they’re asking it. Suddenly, conversations that felt stilted and robotic now flow naturally, like chatting with a knowledgeable and friendly agent.
Take, for instance, a chatbot for an online clothing retailer. A rule-based bot might only be able to answer whether an item is in stock. An LLM-powered AI agent, on the other hand, can engage in a more complex conversation: suggesting outfit pairings, taking note of personal preferences, and even offering advice based past shopping data. It’s like having a personal shopper in your pocket — and it’s all powered by AI.
These intelligent agents are also transforming customer service in industries like banking, healthcare, and travel. Instead of waiting on hold for hours, customers can interact with AI agents that provide real-time assistance, personalised advice, and fast resolutions. Imagine resolving a flight delay, asking for a refund, and even rebooking — all without ever speaking to a human agent. The AI takes care of it, efficiently and without the wait times that have long plagued customer service lines.
The future of conversational AI
If the past few years have shown us anything, it’s that AI chatbots are no longer just tools — they’re partners in customer engagement. But what’s next?
We’re moving toward a world where AI agents won’t just respond to queries but anticipate them. Imagine a chatbot that knows your preferences before you even ask, offering suggestions that feel like they were pulled from your own thoughts. With advancements in machine learning, AI agents will soon be able to predict customer needs with astonishing accuracy. In fact, Gartner predicts that by 2025, 80 per cent of customer interactions will be handled by AI.
As businesses continue to adopt AI, the chatbots of tomorrow will be indistinguishable from human agents in terms of their conversational ability. But don’t worry — AI agents won’t be replacing humans entirely. Instead, they’ll work alongside them, handling routine tasks while freeing up human agents to tackle more complex issues. It’s the ultimate tag team: AI and humans working together to deliver the best possible customer experience.
Wrapping it all up
AI-powered chatbots have come a long way from their rule-based ancestors. They’ve evolved from robotic responders into conversational partners, revolutionising customer engagement across industries. The power of LLMs has made these bots smarter, more human-like, and capable of driving real business impact. So, whether you’re looking to boost customer satisfaction, save costs, or stay ahead of the competition, investing in AI chatbots is no longer a question of “if,” but “when.”
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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
Flash Coffee, a tech-enabled coffee chain, has appointed former Foodpanda CEO Jakob Angele as its executive chairman to steer the company towards profitability.
After a period of rapid expansion across Asia Pacific, the company has scaled back significantly, liquidating its operations in Singapore, Thailand, Hong Kong, Taiwan, and South Korea, leaving it with just 67 stores in Indonesia.
Despite this contraction, Angele is optimistic, noting that most of the remaining outlets are EBITDA-positive. The company has focused on fine-tuning its cost structure and revamping its menu, with 63% of drinks being new offerings tailored to Indonesian tastes.
This strategic shift, coupled with enhanced seating options, has improved offline business performance. Angele, who shares a professional history with Flash Coffee’s founder, believes the brand is well-positioned in Indonesia’s competitive market, offering quality at a medium to high price point.
The company plans to open five to ten new stores in Indonesia this year, with no immediate plans for international expansion. Confident in the potential of the Indonesian market, Angele envisions Flash Coffee expanding to 300-400 outlets domestically while maintaining profitability.
Sainul,
Editor.
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NEWS & VIEWS
Flash Coffee taps ex-Foodpanda CEO in turnaround bid
The tech-enabled coffee chain has hired Jakob Angele as its executive chairman in a bid to hit profitability; Flash Coffee liquidated its operations in Singapore last October, while it sold its Thai business the following month.
Google is working on AI that can hear signs of sickness
According to Bloomberg, Google has trained one of its foundation AI models with 300 million pieces of audio that included coughs, sniffles and laboured breathing to identify, for example, someone battling tuberculosis.
Validus secures up to US$50M from HSBC to support Indonesian MSMEs
The capital will be deployed through Validus’s Indonesian subsidiary, Batumbu, to support local MSMEs and address the country’s financing gap; There’re currently 64.2M MSMEs that contribute 61 per cent of the country’s GDP.
Customers of WazirX unlikely to recover full funds
The Indian cryptocurrency exchange WazirX suffered a US$234M hack in July; George Gwee, a director at restructuring firm Kroll working with WazirX, said that at least 43% of the money any customer had in WazirX is unlikely to be recovered.
Singapore’s GIC acquires logistics facility in Yokohama, Japan
The asset is well-located within the Kanagawa Prefecture and enjoys convenient access to the entire Greater Tokyo region; The facility was developed by Daiwa House Industry, a Japanese real estate developer.
How to fight a costly turnover in an effective way
Posting jobs, interviewing, preparing offers, and onboarding new job candidates are all very costly procedures. Replacing an employee costs an average of ⅙ of their yearly pay, which adds up quickly the higher up the food chain you go.
Is voice the next revolution in fintech?
Owing to the current state of mobile penetration, voice will increasingly be shifting towards higher-value work, including in fintech.
10 unarguable things that great leaders do
Articles have been written by others naming the traits they would like to see in leaders, but you may notice something in common here.
Lokatani, an agritech startup focused on developing hydroponic vegetables, has announced a pre-seed funding round with AsiaPay Capital and Jakarta Ventura (Jakvent).
“This funding will be used for various aspects, from increasing production capacity, developing internet-based agricultural technology, expanding distribution networks, marketing and promotion, to human resource development. This support also allows Lokatani to continue aligning plant production in real-time with customer demand using IoT through an integrated application,” said CEO Abdul Choliq.
Founded in 2019, Lokatani utilises IoT technology, an inventory management system, and hydroponic methods to produce premium vegetables.
Through its on-demand order approach, Lokatani adjusts the production process to customer demand, thus increasing farmers’ production efficiency. The “scheduled planting” system implemented by Lokatani is the key to maintaining supply stability in terms of quality and quantity, supported by IoT technology for automated vegetable maintenance.
The startup’s offerings are:
Loka Fresh specialises in selling high-quality hydroponic vegetables under the “Sayuran Pagi” brand, making fresh vegetables available on demand.
Loka Grow emphasises research and development to empower farming communities through a co-farming scheme.
Loka Tech is an integrated application with IoT that facilitates automated monitoring and agricultural processes, as well as more efficient and effective inventory management.
Hydro Estate offers services for constructing and maintaining hydroponic farms, including greenhouse operations.
“The value chain built by Lokatani is an ecosystem that greatly helps address the fragmented value chain in agriculture systems, particularly in hydroponics. As a strategic investor, we hope to leverage our expertise in payment infrastructure to drive financial inclusion and positively impact hydroponic farmers,” said Rizki Maarif, Venture Investor Team & Research Lead at AsiaPay Capital.
“Lokatani not only serves as an aggregator in this ecosystem but also plays a crucial role in guiding and supporting the farming community. We hope that the farming community, especially hydroponic vegetable farmers, will continue to grow and progress alongside Lokatani,” stated Jakvent CEO Chrisantina Lunaryati.
Asiapay Capital is an investment arm of Asiapay Group, a Hong Kong-based digital payment services company.
Jakarta Ventura is a regional VC company under the auspices of Bahana Artha Ventura (BAV), a subsidiary of the state-owned enterprise of investment and insurance holding company PT Bahana Pembinaan Usaha Indonesia (Persero), also known as IFG.
[L-R] BillEase co-founders Georg Steiger, Huyen Nguyen, and Ritche Weekun, and CFO Garret Go
BillEase, a digital consumer finance platform in the Philippines, has secured an undisclosed strategic investment in a Series C round led by TPG’s The Rise Fund.
Existing investor Burda Principal Investment also participated.
This investment will help BillEase support its growth.
“The Rise Fund has built a global track record of helping socially impactful companies scale, and their investment will empower us to not only sustain our strong growth but also expand our product offerings to serve the underserved and underbanked better, enabling more Filipinos to improve their living standards,” Georg Steiger, CEO of BillEase, said.
BillEase leverages machine learning and AI to build financial products while mixing traditional global credit underwriting best practices to meet customers’ needs. It offers personal loans, e-wallet top-ups, prepaid load, gaming credits, bill payment, a buy-now-pay-later (BNPL) service and deals from over 10,000 merchants and over 600,000 QRPh-accepting merchants.
“In the Philippines, there remains a need among businesses and individuals for greater access to affordable financial products. Only 18.8 per cent of people in the Philippines can reportedly borrow money from a formal financial institution or money provider,” said Lito Camacho, Senior Advisor for TPG. “BillEase is offering a solution that solves that pain point for many, giving access to flexible payment options in a safe and sustainable way.”
In April, BillEase received US$5 million in credit facility from Saison Investment Management, the offshore lending arm of Japan’s Saison International.
In 2022, BillEase completed an up to US$20 million debt facility from Singapore-based fintech firm Helicap Securities.
TailorTech, a Malaysian startup focused on transforming power management for off-grid locations, has raised US$110,000 from Antler.
Founded by brothers Ts. Dr. Indera Shaiful and Ts. Indera Shafiq, TailorTech aims to tackle problems faced by industries that are reliant on generator sets in remote and off-grid locations, including inefficiencies, high costs, frequent maintenance, and the environmental impact associated with conventional generator sets.
TailorTech has developed the Power Enhancer System (PES), an integrated smart power management solution designed to optimise the use of generator sets. Engineered to reduce operational costs and carbon footprints, it provides a solution for industries where reliable, efficient, and sustainable power is critical and costly.
The PES shows potential for a wide range of off-grid generator-set users, including telecom tower operators, plantation estates, mining, construction sites, and rural villages and clinics. In regions such as Malaysia and Indonesia, these sectors frequently need suboptimal power solutions that lead to increased costs and environmental concerns.
While renewable energy sources are often considered viable alternatives, their economic feasibility in diverse and challenging locations remains limited. TailorTech’s PES addresses this gap by enhancing existing generator infrastructure with smart, efficient technology that reduces both costs and emissions.
TailorTech plans to deploy its first on-site installation as a proof of concept for a targeted client. This deployment will be a critical demonstration of the PES’s effectiveness and scalability, potentially paving the way for further investment opportunities and market expansion.
The introduction of TailorTech’s PES is timely, aligning with global efforts toward net-zero carbon emissions and sustainable energy solutions. Although the PES does not entirely eliminate carbon emissions, it offers a substantial reduction, making it a practical and immediate solution in the shift towards greener energy practices.
It’s been a few months since the Berkshire Hathaway Annual General Meeting (AGM) drew to a close, but even today, I find myself reflecting on the invaluable lessons shared by some of the world’s most brilliant investors.
It was an honour to learn from these individuals whose wisdom and generosity continue to shape my journey as an investor. Among the many insights I gathered, one conversation stood out: my chat with Mohnish Pabrai.
Pabrai, an esteemed investor in his own right, offered a simple yet profound piece of advice that encapsulates the essence of Warren Buffett and Charlie Munger’s success —
“Circle of competence grows very slowly. Be patient about it.”
This statement might seem obvious, but its implications are vast and far-reaching, especially in today’s fast-paced investment environment.
The circle of competence: A deliberate and gradual expansion
Pabrai’s emphasis on the circle of competence is a reminder that mastery in investing doesn’t happen overnight. He pointed out that Buffett and Munger didn’t rush into investing in Coca-Cola. In fact, it wasn’t until after 16 years of experience with See’s Candies—a company they bought in 1972—that they truly understood the power of a brand and a consumer monopoly. This understanding didn’t come from a quick study or a sudden insight; it was the result of years of observation, learning, and deep immersion in their circle of competence.
The idea of a circle of competence is not new. Buffett himself has spoken about it extensively, urging investors to stick to what they know and to be cautious about venturing into unfamiliar territories. However, what Pabrai highlighted was the patience required to expand this circle. It doesn’t grow rapidly; rather, it expands slowly, as one accumulates knowledge and experience over time.
In an era where speed is often equated with success, the idea of being patient can feel counterintuitive. We live in a world that celebrates quick wins and instant gratification, where the pressure to make fast investment decisions can be overwhelming. The temptation to chase after the latest trends, to dive into industries we barely understand, and to expect immediate returns is ever-present.
Yet, as Pabrai reminded me, true understanding cannot be rushed. Buffett and Munger’s decision to invest heavily in Coca-Cola, a position that eventually occupied a quarter of Berkshire Hathaway’s entire book value, was not made in haste. It was the result of years of patient observation, during which they built a deep conviction in the company’s long-term potential.
The same principle applied when Buffett invested in Apple—a move that came after 44 years of careful study and reflection. Despite the time it took, these investments became cornerstones of Berkshire Hathaway’s success, proving that patience is not just a virtue in investing; it is a critical component of long-term success.
Connecting the dots over time
Pabrai’s insights serve as a powerful reminder that investing is a journey, not a race. The desire to move quickly is understandable; we all want to see our investments grow and succeed. But rushing the process often leads to mistakes, misunderstandings, and missed opportunities. Building a strong foundation of knowledge, on the other hand, takes time and effort. It requires a commitment to learning, a willingness to go deep, and the patience to wait for the right opportunities.
Buffett’s famous analogy — “You can’t produce a baby in one month by getting nine women pregnant” — is a humorous yet poignant illustration of this principle. Some things simply cannot be hurried. The dots that make up the picture of a successful investment strategy will connect eventually, but only if we take the time to understand them fully.
Embracing the slow and steady approach
Reflecting on Pabrai’s advice, I find myself more committed than ever to the idea of slow and steady progress. As investors, we must resist the urge to rush into decisions. Instead, we should focus on gradually expanding our circle of competence, learning from our experiences, and patiently waiting for the right moments to act.
The rewards for this approach are clear. Buffett and Munger’s success is not just a result of their intelligence or insight, but of their patience and persistence. They understood that great investments are built on a foundation of deep knowledge and strong conviction—both of which take time to develop.
As I continue on my own investment journey, I carry with me the lessons from this year’s Berkshire Hathaway AGM, particularly the wisdom shared by Pabrai. His reminder to be patient, to go slow, and to trust in the process of building a circle of competence has reinforced my belief that true success in investing is not about speed, but about depth and endurance.
So, the next time I find myself tempted to rush into a decision, I’ll remember Pabrai’s words and the example set by Buffett and Munger. After all, in the world of investing, it’s not about how fast you get there, but how well-prepared you are when you do.
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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
It is not a controversial opinion that increasing technological intensity in an economy increases prosperity. Certainly, the benefits of a tractor over a farm animal or automated mass production over handicraft production make this apparent.
Thailand, like many countries, has been attempting to build a local tech innovation ecosystem where local startups grow to be tech unicorns.
In the period after the global financial crisis with zero per cent interest rates, it seemed plausible that every country could build its own version of a mini-silicon Valley as global venture capital investment exploded from US$43 billion in 2007 to over US$300 billion a year from 2018 on.
Unfortunately, despite huge efforts by many fantastic people in the private sector and the government, the level of start-up activity has stubbornly refused to grow and is about the same level now as 5 years ago.
And the output of the ecosystem reflects this. The UK, which has a similar population size to Thailand, has about 3–4000 funded deals a year. Of which about 2000 are seed or early stage. Thailand is having a great year if it gets over 30.
The cumulative result of this over time is that Thailand has 658 funded tech startups in its ecosystem and the UK has over 43 thousand.
Source: StartupBlink
So now that we have the evidence that the current strategy is not achieving the desired output, what should a country like Thailand do?
The Silicon Valley/Cambridge Cluster model of tech startup and scale up requires a number of factors to all be in place simultaneously to work:
It takes a lot, a lot, of patient yet high risk capital
It requires large numbers of highly educated young people willing to take risks
It requires a lot of experienced service providers to support startups (70 per cent of the employment in tech clusters is in support companies such as marketing agencies, lawyers, etc)
It requires world class universities that have the right policies on IP for spin outs
It requires a legal and tax system that is conducive to the risk and reward nature of tech investing
It requires a culture that views failure as something that develops skills so everyone in the system is more willing to take risk
If any of these factors are missing, the ecosystem fails to thrive. And out of these six factors Thailand has, it could be argued, none.
And as shown above, the outputs reflect this with a small number of funded startups each year that is barely growing.
Which of these factors can Thailand realistically change in the short to medium term? Again, probably none.
This is not because Thailand is worse than any other country. Despite a tsunami of money over the last decade and more, 75 per cent of all unicorns still come from just three ecosystems. Its just not a model that works in many places.
So what should a country like Thailand do? Just give up and accept it will just be a customer buying new technology from overseas forever?
An alternative strategy is that Thailand (and other countries in a similar position) should do in technology entrepreneurship what it does in every other business, understand that it cant do everything itself, that its part of global supply chains and find its place in those chains where it can create prosperity for itself.
An example for Thailand that worked before was its focus on being part of global automotive component supply chains rather than building a national car company like Malaysia tried.
Once the component production was in place and the workforce developed skills, experience and international relationships, and the government and local partners understood what investors needed, more of the supply chain began to be deployed in Thailand until, eventually, Thailand not only became a global assembly hub for cars, “The Detroit of Asia”, but now is a leading destination for global investment in EV production based on this foundation of acquired expertise and infrastructure.
However, now is not then. And the companies producing the technologies that create enormous value today have different requirements than in the past when Thailand was first industrialising.
Cheap labor, cheap land for factories, easy environmental regulations, good physical infrastructure in the industrial zones, policies based on large investments paying off over several years and a government capable of working with large foreign companies aren’t what are needed anymore.
The new industrial strategy needs to work with the smaller and midsized growth tech companies rather than the mature tech companies where its just a customer or competes with low cost countries to be a supplier.
So it needs to be focused around highly skilled local staff, flexibility in location, ease of foreign workers working in the country in flexible time periods, high environmental standards, excellent digital infrastructure and a government that knows how to work with foreign startups and SMEs.
And similarly, government goals based on investment amounts, employment generated and exports aren’t appropriate in an age when 55 employees can generate in four years US$19 billion of value as those at WhatsApp did.
The great thing about the leading tech clusters is that they are already highly internationalised and are very open to working with all comers. Its well known the majority of US unicorns are created by immigrants as just one example, showing the willingness of the VC industry to invest in newcomers and development of the global internet in the last 25 years means physical proximity becomes optional.
Thailand’s tech ecosystem should become something that extends beyond it’s borders and overlaps the existing global tech ecosystems. And vice versa, it should be easier for the world to work with and in Thailand.
And most importantly, there needs to be real deployment projects that both sides get to work alongside each other and build the mutual understanding, trust and ability to achieve goals together and solve problems that can’t be developed theoretically or through discussion at conferences.
And, paradoxically, the interactions with the earlier stage of the global tech ecosystems must be led by the larger Thai companies. As I’ve discussed before the presence of “Institutional Gaps” means that the deployment of new technologies is easier for companies that have the highly skilled staff on hand and the resources to bridge those gaps.
It looks initially as if its cementing large corporate dominance, but it will help create an ecosystem that is intertwined and connected to the leading tech clusters of the world, prosperous and growing, with exposure to the new technologies and trends earlier that will fuel the next generation of Thai entrepreneurs that will have benefited from working on successful tech deployment projects with young international tech companies and built up the skills, experience and international networks to give them the confidence and access to resources to leave the corporates and make their own entrepreneurial activities a success.
So anyone looking to have an impact on an emerging market tech ecosystem I would suggest not becoming the 47th investment fund or the 23rd accelerator, but to help build bridges, working relationships and extended networks between locals and the global clusters that will make the country an extended part of a larger ecosystem that supplies from its entirety, not just locally, all the factors necessary for tech innovation success.
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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.
