Foreign Firms, Investors Eye Thai Fintech Opportunity

Foreign Firms, Investors Eye Thai Fintech Opportunity

by September 27, 2017
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Foreign fintech companies and investors are looking at the Thai market as many plan to ride on Thailand’s startup boom and growing digital economy.

Indonesia’s Kejora Ventures, one of the region’s most active private venture capital firms, expanded to Thailand earlier this year.

“We see a lot of potential in the tech start-up scene in Thailand and want to be at the forefront of supporting corporate innovation in the country,” said Sebastian Togelang, founding partner of Kejora Ventures. “Thailand is a natural extension of our vision of setting up a tech community that will work together to share our knowledge.”

Bangkok_from_the_sky Thailand

Image credit: Bangkok from the sky, via Wikimedia

Thailand, Southeast Asia’s second largest economy in Southeast Asia after Indonesia, is seen to be at an ideal position to take advantage of a global digital wave transforming economics and societies.

The government is supporting the startup ecosystem with a 20 billion baht (US$604 million) venture fund that it announced last year.

In December 2016, the Bank of Thailand launched a regulatory sandbox for fintech solutions and new business models. Several companies have been accepted so far including three ventures that use blockchain technology for letter of guarantee and cross-border payment, and one that specializes in biometrics identification.

Another sandbox was launched by the Office of the Insurance Committee (OIC). This one focuses on insurtech startups and solutions.

Additionally, initiatives such as the Bangkok Bank InnoHub acceleration program are facilitating collaborations between fintech startups and commercial banks in Southeast Asia.

But Kejora Ventures primarily has its eyes on a specific Thai fintech startup with great potential. In February, Kejora Ventures alongside US-based K2 Ventures, invested US$1.5 million in seed funding in MoneyTable, a platform that helps employees explore financial options.

Another overseas firm that is looking to tap into the Thai market is JD.com, a leading Chinese e-commerce operator. Earlier this week, the company signed an agreement with retail giant Central Group to invest up to US$500 million on the establishment of two join ventures in Thailand covering online sales and fintech services.

Richard Liu, JD.com’s chairman and CEO, said:

“Thailand’s large population and developed infrastructure, including strong national logistics networks, give it tremendous potential for both e-commerce and fintech services.”

Singapore-based cash rebate service ShopBack expanded to Thailand earlier this year. Over 100 merchants there are already onboard the platform.

This is not surprising as in July the Central of Thailand announced a partnersthip with Singapore’s Monetary Authority MAS.

Alternative credit scoring provider CredoLab has operations in Thailand as well as Singapore, Indonesia, the Philippines, Malaysia, Vietnam and Myanmar. The startup has developed a credit scoring mobile app called CredoApp that uses data from one’s cellphone to determine a credit score in just a few minutes. This helps banks to increase their approval rate and reducing their cost of risk.

CredoLab’s solution is targeted at emerging markets with significant unbanked demographics with no credit history, which is a huge and promising market for credit institutions. Therefore, the startup partners with banks and financial institutions across Southeast Asia to integrate its technology into their existing infrastructure.

Thai fintech startups gain traction

Thailand has got several successful fintech startups of its own. Some of them have already attracted foreign investors and global recognition.

Finnomena, a venture that operates in the wealth management space, recently raised US$3.2 million in its Series A funding round led by Krungsri Finnovate, a subsidiary of Krungsri (Bank of Ayudhya). Telecom group Benchachinda Holding and 500 TukTuks, 500 Startups’ Thai micro-fund, also joined the round.

finnomena thailand

Finnomena, Facebook

Finnomena aims to raise awareness and educate Thai people about investment and financial planning. It does so by publishing various kinds of financial articles, video streaming, and organizing seminars all over the country. Finnomena also gives investment advice through its robo-advisor NTER.

500 TukTuks is also an investor in T2P, another fintech startup. T2P is the owner and operator of e-wallet mobile app DeepPocket. which delivers several banking services.

Another popular Thai startup is payment gateway Omise. The company has raised over US$45 million in total funding so far and is backed by the likes of SBI Asset Management, Golden Gate Ventures and 500 Startups.

 

Featured image by Andre Gunawan, Tech in Asia, https://www.techinasia.com.

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