A sizeable market mindset, consideration of both loss and profit as well as government support allowing fair competition between local and foreign players are imperative in building the first unicorn startup in Thailand, say leading local startups and venture capitalists.
A unicorn is a startup valued at more than US$1 billion.
"In 2020, local startups found it challenging as they struggled for funding and players in several affected sectors, such as travel and lifestyle, were forced to pivot or hibernate," said Yod Chinsupakul, chief executive and co-founder of Line Man Wongnai.
"However, some local startups reaped a windfall from the pandemic, including online food delivery, e-commerce, logistics and fintech."
Mr Yod's comments were made during an online seminar on support for local startups, held yesterday by Amazon Web Services (AWS), a subsidiary of US tech giant Amazon that specialises in on-demand cloud services.
Mr Yod said to become unicorns, startups need to have sizeable market mindset. Line Man Wongnai wants to become a "national champion" for the food ecosystem by 2023 and aims to become the first unicorn in Thailand, he said.
With the lack of investment during the pandemic, startups need to take into account both profit and loss, not only focusing on growth, said Mr Yod.
To strengthen local startups, the government needs to build a startup-friendly environment, including regulations and fair competition with foreign startups, who still do not have to pay a corporate tax or a value-added tax.
Korawad Chearavanont, chief executive of Amity, a Thai tech startup, said Amity focuses on cloud-based enterprise software for communication, virtual workplace collaboration and chatbot, which goes in line with the prevailing trend of cloud usage and digitization in the wake of the pandemic. It is operating in Bangkok, London, Amsterdam, Milan and Austin, Texas.
Thai or Asean markets alone may not be large enough for enterprise software usage unlike in Europe, he said.
"Local startups need to thrive as a national champion and expand regionally," he said. To become unicorns, startups need to have a big mindset, engaging in global or regional activity.
Pahrada Sapprasert, director of 500 TukTuks, a venture capital arm of US-based 500 Startups, said unicorns are only at a threshold level but this cannot guarantee that they would be sustainable or successful.
Funding declined in 2020 due to the pandemic and it is likely to see few startups go public via IPOs over the next 3-5 years, she said. Local startups need to be lean, save on cost and adjust strategies amid sluggish liquidity, she said.
Meanwhile, Thai people need to support local startups' products and services and the government needs to usher in capital-related regulations that would be a boon for startups, she said.
AWS country manager Chawapol Jariyawiroj said there are 1,400 startups in Thailand but still no unicorn. Startups need to level up their competitiveness and catch up with the market trend by taking into account customer experience and value.