Startups told to illustrate real potential
Startups should accelerate efforts to make sure their projects are promising enough or else they may fail to secure funding from investors who are becoming increasingly interested in the cryptocurrency market, says a local angel investor.
"Any startup growing slowly is now at risk of losing funding as investors are tempted to allocate money in their portfolio to cryptocurrency," said Amarit Charoenphan, an angel investor and co-founder of tech media Techsauce and co-working space Hubba.
"You must try hard to make your business interesting. Despite a love for startups, if the returns are unappealing, investors will start to reallocate their money, he said.
According to him, although the cryptocurrency market remains volatile, its value will continue to rise in the long run in line with the trend.
Mr Amarit was speaking at a recent virtual seminar event on startup funding organised by the Startup Thailand Club.
He said startups linked with electricity vehicles (EV) also have the potential to grow.
"People will experience a new wave in which all vehicles are changed to EVs, including boats, buses and trucks," Mr Amarit said.
Another promising sector is cannabis, however, this industry is still plagued with regulation and more time is needed for it to thrive, he said. Thailand is also suitable for startups focusing on food.
In 2020, investments in Thai startups reached a record high of US$364 million (about 11.4 billion baht), up from $109 million a year earlier, though the number of deals dropped from 45 in 2019 to 33 in 2020, according to Techsauce.
Sarun Sutuntivorakoon, president of the Thai Venture Capital Association and partner of N-Vest Venture, said after the pandemic took hold last year, venture capitalists (VCs) have become more interested in investing in sizeable deals.
"With lingering uncertainty, many VCs believe that investing in small startups is high risk. It is normal for small startups with tepid funding to falter," Mr Sarun said.
This year, Thailand will see investments in local startups raising funds in Series B or higher rise while funding for seed-stage rounds will drop, he said.
"Startups in seed-stage are more likely to be left out this year and next year," Mr Sarun said.