Thailand eyes ‘Unicorn Factory’ to propel startups to global success

Krithpaka Boonfueng, executive director of the National Innovation Agency (NIA), said recently that the initiative focuses on connecting startups with potential venture capital, expanding markets and facilitating international growth. She added that the idea has also been discussed with the National Startup Committee and other relevant agencies.

"If this project is launched and implemented, it will be an excellent path for Thailand’s unicorns to grow," she explained, adding that if the proposal goes ahead as planned, the Unicorn Factory should be visible within the next three months.

The move is in line with the government’s planned National Startup Act, which aims to support a seamless startup ecosystem. Despite many startups encountering failure, the NIA director is optimistic about a successful 2024, provided they focus on the right market demand.

“There is up to 30 billion baht available in funding for Thai startups, but venture capitalists now are more selective. Instead of just looking at concepts and ideas, they want to see the company’s balance sheet and concrete growth opportunities,” she explained.

Hence, she said, NIA aims to groom Thai startups to meet global standards.

Big startup market

As of this year, Thailand has some 2,100 startups, with 700 in the pre-seed stage and 1,400 in the ready-to-go stage.

The NIA continues to drive and empower Thai startups, responding to innovation demands in ASEAN and global markets, she said. 

With a significant surge in internet users in Thailand, digital technology businesses are gaining popularity, especially in Generative AI. More than 80% of enterprises are expected to adopt Gen AI, API (application programming interface) and applied models in manufacturing operations by 2026. Early last year, less than 5% of Thai companies had adopted these technologies.

Thai startups in the AI sector are predicted to attract investments exceeding 6 billion baht in 2024. Krithpaka highlighted emerging sectors in the startup industry like agriculture, food and herbs, health and medicine, soft power, climate technology and tourism.

“They all have the potential to attract foreign investors. We [NIA] intend to provide startups with a variety of services, including financial support for innovative business development, platform support for entrepreneurs to run their businesses and collaborations with Thai and foreign agencies,” she added.

Programs such as the Smart Visa, implemented in collaboration with the Board of Investment and the Global Startup Hub, aim to attract startups, investors and professionals to develop innovation in Thailand, she said.

The NIA is also collaborating with universities across Thailand to ensure even distribution and support for new startups.

“Economic uncertainties, downturn and a shift towards more sustainable business models have all contributed to a significant drop in startup funding in 2023 compared to 2022. However, the Southeast Asian market appears to be on track to rebound and grow in 2024,” she said.

Top investment destination

Thailand remains a viable investment destination thanks to its large domestic market, convenient business operations, competitive stock market and low startup costs, Krithpaka said.

Plus, she said, the technological infrastructure in the country is ready to support business operations, while the stock market is competitive with impressive valuation and liquidity strengths.

“When compared to other countries, Thailand’s startup investment costs are still low. More AI applications are expected in Thailand this year, including business analytics, market analysis, medical process improvement, education and job creation. As a result, AI-enabled industries such as electronics and robotics are expected to see an increase in business value,” she said, promising that the government will provide strong support, especially for AI application research.

Healthy ecosystem

This year, NIA received a budget of 1 billion baht and an additional 150 million baht in research grants from Thailand Science Research and Innovation (TSRI) With such funding, she said, more Thai startups will emerge this year, including some unicorns.

“NIA’s key approach is to provide financial support to innovation-driven business development that addresses sustainability issues in agriculture, plant and animal industries as well circular and low-carbon economies, clean energy and digital businesses that deploy AI, Robotic, and Immersive & IoT [ARI Tech], as well EVs and related technologies," she said.

NIA aims to foster a startup ecosystem, promoting growth through investment and market connectivity. Thailand’s startup scene has witnessed significant growth in 2023, with over 1,000 new startups entering the market. LINEMAN Wongnai, meanwhile, is one of the startups to hit unicorn status this year, with a marketing capitalisation of US$265 million (9.44 billion baht). Thailand is also ranked 52 on Startupblink's Global Startup Ecosystem Index.